RE 3381 Test 1 Review 2025 (SMU Cahoon) Questions With
Complete Solutions
1st Rule of Real Estate Valuation Correct Answers Investment
decisions should not be based on your beliefs about the property;
they should be based on your beliefs relative to those of the
market
3 Elements of Zoning Correct Answers 1. Allowed uses
2. Site development standards
3. Geographic location of uses
3 Factors of Bid Rent Model Correct Answers 1. Commuting
speed/time
2. Wages
3. Distance to Point of Access
3 Methods to Estimate Cost Correct Answers (1) Quantity
Survey Method
(2) Unit-in-Place Method
(3) Comparative-Unit Method
4 Types of Deeds Correct Answers 1. General Warranty
2. Special Warranty
3. Bargain and Sale
4. Quitclaim
Acceptable forms of ownership proof: Correct Answers Deeds,
Contracts, Wills or other property records
, Air Rights Correct Answers The right to use the open space
above a property, usually allowing the surface to be used for
another purpose
Anticipation Correct Answers Value is created by the
anticipation of benefits to be derived in the future
Asset/Capital Markets Correct Answers Consists of "the
financial world"
Bid Rent Model Correct Answers Explains land value as an
allocation of resources between location and proximity
Building Codes Correct Answers Collections of laws involving
physical structure and condition of buildings (includes green
standards, ADA, design laws)
Cap Rates (y) Correct Answers Represent what an investor will
accept today as a yield on the current NOI
Cap Rates and Value Correct Answers Cap rates do not
determine value; they merely reflect market perceived changes
in CF projections and/or required returns
Cap Rates are determined by... Correct Answers Risk Free
Rates + Risk Premiums for Assets + Expected Growth in
Income
Captial Intensive Correct Answers Largely indivisible and
leveraged transactions
Complete Solutions
1st Rule of Real Estate Valuation Correct Answers Investment
decisions should not be based on your beliefs about the property;
they should be based on your beliefs relative to those of the
market
3 Elements of Zoning Correct Answers 1. Allowed uses
2. Site development standards
3. Geographic location of uses
3 Factors of Bid Rent Model Correct Answers 1. Commuting
speed/time
2. Wages
3. Distance to Point of Access
3 Methods to Estimate Cost Correct Answers (1) Quantity
Survey Method
(2) Unit-in-Place Method
(3) Comparative-Unit Method
4 Types of Deeds Correct Answers 1. General Warranty
2. Special Warranty
3. Bargain and Sale
4. Quitclaim
Acceptable forms of ownership proof: Correct Answers Deeds,
Contracts, Wills or other property records
, Air Rights Correct Answers The right to use the open space
above a property, usually allowing the surface to be used for
another purpose
Anticipation Correct Answers Value is created by the
anticipation of benefits to be derived in the future
Asset/Capital Markets Correct Answers Consists of "the
financial world"
Bid Rent Model Correct Answers Explains land value as an
allocation of resources between location and proximity
Building Codes Correct Answers Collections of laws involving
physical structure and condition of buildings (includes green
standards, ADA, design laws)
Cap Rates (y) Correct Answers Represent what an investor will
accept today as a yield on the current NOI
Cap Rates and Value Correct Answers Cap rates do not
determine value; they merely reflect market perceived changes
in CF projections and/or required returns
Cap Rates are determined by... Correct Answers Risk Free
Rates + Risk Premiums for Assets + Expected Growth in
Income
Captial Intensive Correct Answers Largely indivisible and
leveraged transactions
