What is the scale factor used when going from a larger rectangle to the smaller one? if this is even a valid question..

The scale factor would be the ratio between the similar sides. Look at the picture below. These are two similar rectangles. Side AB corresponds to side EF. So the scale factor would be the length of the new rectangle divided by the length of the corresponding side for the original rectangle.

4/8 = 1/2

So the scale factor is 1/2. Note: If you're going from a bigger shape to a smaller one, you know that the scale factor must be less than 1. Similarly, if you're going from a smaller shape to a bigger shape, you know that the scale factor must be greater than 1.

And you have to divide the corresponding sides. If you knew side BD, you couldn't divide it from 4, because BD and EF aren't corresponding sides.