REA Cheat Sheet 2026

The 30 highest-yield REA facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. The Home Mortgage Disclosure Act (HMDA) requires lenders to collect and report data on mortgage applications primarily to: → Help identify potential discriminatory lending patterns and inform housing policy
2. An analyst who holds the CFA designation is primarily bound by ethics standards set by: → CFA Institute
3. What is an appraisal report? → A document detailing methods and findings in property valuation
4. Under the Truth in Lending Act (TILA), lenders must disclose which of the following to mortgage borrowers? → The annual percentage rate (APR) and total cost of the loan
5. A real estate analyst using a hedonic pricing model is attempting to: → Isolate the value contribution of individual property attributes
6. In the cost approach, 'entrepreneurial profit' represents: → The developer's expected profit for undertaking the risk of development
7. How does interest rate fluctuation affect real estate market analysis? → By determining property prices
8. What is the cost approach in property valuation? → Adding land value and building replacement costs, less depreciation
9. In industrial real estate analysis, 'clear height' is an important physical metric because: → It determines the cubic storage capacity and suitability for modern logistics operations
10. What is the primary objective of real estate portfolio diversification? → Reducing overall risk by spreading investments across uncorrelated assets
11. In real estate market analysis, 'net absorption' is defined as: → The change in occupied space over a period, reflecting new occupancy minus space vacated
12. What is 'construction contingency' in a development budget? → A reserve percentage added to hard costs to cover unforeseen construction expenses
13. What is 'functional obsolescence' in the context of real estate appraisal? → Loss in value due to outdated design or features within the property
14. What is the purpose of a 'hold-sell analysis' in real estate portfolio management? → Comparing the NPV of holding a property against the net proceeds from selling it
15. What key financial metrics should be considered in real estate investment analysis? → Only cash flow
16. What does 'leasing velocity' measure in commercial real estate operations? → The pace at which vacant space is being signed to new leases over a given period
17. In a real estate LBO model, increasing leverage while holding NOI constant will typically: → Increase the equity IRR and increase risk
18. Qualified Improvement Property (QIP) placed in service after December 31, 2017 has a MACRS recovery period of: → 15 years, making it eligible for bonus depreciation after the CARES Act correction
19. In real estate risk analysis, what is 'rollover risk'? → The risk that leases expire and cannot be renewed at current or higher rents
20. What is the income approach in property valuation? → By evaluating the income the property generates
21. An analyst is comparing two office markets. Market A has a 5% vacancy rate and Market B has an 18% vacancy rate. Which conclusion is best supported? → Market A has tighter supply conditions and likely stronger rent growth
22. The concept of 'plottage' in real estate refers to: → The incremental value created by combining adjacent parcels into one larger parcel
23. A real estate market analyst uses a Herfindahl-Hirschman Index (HHI) analysis of a local office market. What is the analyst most likely measuring? → Market concentration among office landlords or tenants to assess competitive dynamics
24. Under NAR's Code of Ethics, Article 1 requires REALTORS® to: → Protect and promote the interests of their client while treating all parties honestly
25. What are environmental regulations in real estate? → To ensure properties are developed in an environmentally responsible manner
26. What is internal rate of return (IRR)? → The rate that makes NPV equal to zero, assessing profitability
27. Under the Americans with Disabilities Act (ADA), which of the following is a public accommodation requirement for commercial real estate? → Landlords must provide accessible parking if the property has a parking lot
28. Why is debt service coverage ratio (DSCR) important in real estate analysis? → To track rent payments
29. The 'band of investment' technique is used in appraisal to determine the: → Overall capitalization rate based on debt and equity components
30. A cost segregation study benefits a real estate investor primarily by: → Reclassifying building components into shorter depreciable lives to accelerate deductions