REAL ESTATE EXAM QUESTIONS AND 100% CORRECT ANSWERS|2025/2026|GUARANTEED A+

REAL ESTATE EXAM QUESTIONS AND 100%


Two Types of Property: -
B B B B



BANSWER 1.) Tangible: physical assets that can be owned (can be real or personal proper
B B B B B B B B B B B B B



ty).

2.) Intangible: non-physical assets (such as stocks, bonds, mortgages, leases, etc.).
B B B B B B B B B B




Real Estate: - ANSWER
B B B - The physical/tangible land and its improvements.
B B B B B B




-
BFor example, the Neutron Bomb destroys all life on Earth, there'e no real property left becaus
B B B B B B B B B B B B B B B



e nobody is there to have rights, but there is real estate left with the land and its improvement
B B B B B B B B B B B B B B B B B B



s present.
B




Land: - ANSWER B B - The natural surface (ground, water, dirt, etc.).
B B B B B B B




- Boundaries are not obvious or natural.
B B B B B B




- Boundary errors always hurt someone.
B B B B B




- Last indefinitely and will not be depreciated.
B B B B B B B




Improvements of Land: - ANSWER - B B B B



BAny manmade (buildings, walkways, driveways, lighting, parking lot, excavation and landfill, s
B B B B B B B B B B B



ewers and utilities, etc.) structure permanently attached to the land.
B B B B B B B B B




- Have a limited life and are depreciated.
B B B B B B B




"Real Estate" Used in Three Ways: - ANSWER
B B B B B B B 1.) Real estate as a tangible asset:
B B B B B B




- "Raw" land.
B B




-
BImprovements to the land: excavation and landfill, sewers and other utilities, roads and drive
B B B B B B B B B B B B B



ways.

- Structures (improvements on the land).
B B B B B




2.) Real estate as a bundle of rights:
B B B B B B B




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,- Exclusive possession of the real property.
B B B B B B




- Use or enjoyment (can use as rental property to generate cash flow).
B B B B B B B B B B B B




- Disposition.
B




- Can be unbundled in many ways.
B B B B B B




3.) Real estate as an industry and profession:
B B B B B B B




-
BFor example: brokerage, development, leasing, property management, asset management, r
B B B B B B B B B



eal estate law, appraisal, government regulation and taxation, etc.
B B B B B B B B




Real Estate in the Economy: - ANSWER
B B B B B B - Half of the world's wealth.
B B B B B




- Generates over 28% of U.S gross domestic product (GDP).
B B B B B B B B B




- Real estate makes up about 2/3 of our economy.
B B B B B B B B B




What Determines Real Estate Values? - ANSWER
B B B B B B -
Interactions in 3 distinct markets/sectors:
B B B B B




1.) User (space) markets.
B B B




2.) Capital markets.
B B




3.) Governmental sector(s).
B B




User Markets: - ANSWER
B B B - Market for the physical real estate.
B B B B B B




- "Buyers" receive the right to use space.
B B B B B B B




- Where rental rates are determined.
B B B B B




- These markets are very "local" and usually highly competitive.
B B B B B B B B B




User Markets Demand & Supply: - ANSWER
B B B B B B 1.) On the demand side:
B B B B




-
BIndividuals, households, and firms who require space either for consumption or production p
B B B B B B B B B B B B



urposes.

2.) On the supply side:
B B B B




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, - Real estate owners/operators who rent space to tenants.
B B B B B B B B




*Both demand and supply side of user markets are very specific to location and building type.
B B B B B B B B B B B B B B B



*



Capital Markets: - ANSWER
B - B B



Real estate competes for funds in capital market with other asset classes, such as stocks and b
B B B B B B B B B B B B B B B B B



onds.

- Investors select a mix of investments based on expected returns and risk.
B B B B B B B B B B B B




Public v Private Capital Markets: - ANSWER
B B B B B B 1.) Public:
B




- Small homogeneous units (shares) of ownership in assets trade in public exchanges.
B B B B B B B B B B B B




- Many buyers and sellers.
B B B B




- Price quotes available for all to see.
B B B B B B B




- Characterized by a high degree of liquidity.
B B B B B B B




- Informatioanlly efficient.
B B




2.) Private:
B




- Absence of centralized market (or even price lists).
B B B B B B B B




- Assets trade infrequently in private transactions (thus a lack of transparency).
B B B B B B B B B B B




- Common for "whole" assets to be traded in a single transaction (indivisibility).
B B B B B B B B B B B B




- Less liquidity than public markets.
B B B B B




- Higher transaction costs.
B B B




What Are Rights? - ANSWER
B B B B 1.) Claims that the government is obligated to enforce:
B B B B B B B B




- Derived from the Constitution.
B B B B




- Different from raw power.
B B B B




2.) Non-revocable:
B




- Can be reduced in the interest of health, safety, and welfare.
B B B B B B B B B B B




3.) Enduring:
B




- Not limited to the memory of owners or others.
B B B B B B B B B




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