Study On The Total Risk Management Of Real Estate Development Project Based On Process

Real estate is a project-oriented industry. Its main feature is high risk and high profit. As thehigh value-added comprehensive industry, it's sensitive to the economic development. During thedevelopment, it's full of uncertainties. Nowadays, the policies for real estate is keeping change.Under such circumstances, the risk factors in real estate development are increasing. However,most of our companies are too small. They don't have enough capital and land resources. So theprojects are always failed. In order to avoid the risk factors of project, it's important to foresee therisks before investment, identify the main influences and access the trend of risks. Thus the realestate company can take effective measures to control the risks to a minimum range.However, the theory on real estate risk development is very limited. It cannot effectivelyguide the practice of real estate development. So this paper is to make a total research on realestate risk management based on its process.First, under the new environment of real estate development, it puts forward that it's veryimportant to control risk of real estate project by scientific methods. Then, According to the coreidea of Total Risk Management (TRM), the paper, makes a structure based on projective,organization, process and methods. In this structure, the process and methods are the maincontents. So the paper makes a deep research in the total risk management methods based on itsprocess: risk identification, risk evaluation, risk response and risk monitor. It summarizes all kindsof risks at four stages (invest decision, project preparation, construction and sales). Secondly itevaluates the risk factors by combing the qualitative and quantitative methods. Then make the riskmanagement plan to limit the costs. Finally, add risk monitor process to make the riskmanagement more useful. All these methods are well used in an actual project- Yazhou GardenProject. So the idea of TRM is fit for the real estate risk management. Hopefully the study of thispaper can provide valuable references to eliminate the risks in real estate development.