Question 1
What amount of earnest money, if any, must a buyer deposit with an offer to purchase to make the purchase agreement enforceable?
- A. Three percent of the purchase price is required when financed with a government loan, 2% when financed conventionally.
- B. No earnest money is required as long as the property is to be purchased with cash.
- C. An earnest money deposit is not required in any real estate transaction.
- D. A nominal $1 valuable consideration is required.
Question 2
In order to qualify for payment from the Real Estate Guaranty Fund to replace trust funds misappropriated by a licensee, a claimant must
- A. obtain a civil judgment and file a criminal complaint against the offending licensee.
- B. have an attorney file a proof of claim with the Superior Court.
- C. file an application for recovery with the Attorney General.
- D. submit proof of loss to the Real Estate Commission.
Question 3
Employment agreements between salespersons and their employing brokers must include the
- A. amount of notice of termination that the broker is required to give the salespersons.
- B. rate of commissions to be paid to the salespersons upon termination of employment.
- C. amount of notice of termination that the salespersons are required to give the broker.
- D. period of time after termination during which the salespersons are prohibited from opening their own offices.
Question 4
A barber who leases space in a building recently installed two new barber chairs in order to expand the business. If the barber wishes to move to a better location, can she legally take the chairs with her?
- A. No, because any item that has been added as a permanent part of a building is considered a fixture and cannot be removed by a tenant.
- B. No, unless she reimburses the landlord for their value.
- C. Yes, because trade fixtures can be removed as long as the tenant accepts responsibility for any damages occurring during removal.
- D. Yes, because trade fixtures never become the property of a landlord unless the tenant chooses to sell them.
Question 5
A couple is buying their first home and they are unsure as to the integrity of construction. How should their buyer’s agent advise them?
- A. The agent should suggest FHA financing as they will get an inspection when the appraiser values the property.
- B. Their offer should be written contingent upon a satisfactory inspection by a professionally trained home inspector.
- C. The buyer should ask a friend or relative to look over the property, thereby foregoing the expense of an inspection.
- D. The agent should thoroughly inspect the property to determine if there are any latent defects which could be material.
Question 6
A licensee who has a salesperson’s license in referral status can
- A. refer prospects to any broker.
- B. only refer prospects to their broker.
- C. refer prospects and conduct an open house.
- D. refer prospects, cold call for leads and conduct a showing.
Question 7
A major advantage of ownership in severalty is
- A. flexibility in making decisions.
- B. sharing the risk with others.
- C. joint decision making.
- D. the risks are high.
Question 8
A buyer’s agent is NOT permitted to tell a buyer that:
- A. the seller is willing to accept less than the listing price because of financial circumstances
- B. a former occupant of a property had AIDS
- C. the roof leaked recently but was patched by the owner
- D. the property was the scene of a serious crime
Question 9
Smith bought a landlocked property from Jones on the condition that Jones grants Smith an easement across the property to the road. Appropriate documents were drawn, but the easement was never recorded. Later, Smith sold the property, but did not mention the easement. Is there a valid easement across the property?
- A. No, because the original easement was not recorded.
- B. No, because the second transfer did not specifically mention the easement.
- C. Yes, because the easement runs with the land, not the person.
- D. Yes, because Smith held the servient estate and Jones held the dominant estate.
Question 10
A real estate licensee lists a home for $205,000. Later that same day, a potential buyer comes into the licensee’s office and asks for information on houses for sale in the $180,000 – $215,000 price range. The licensee offers to represent the buyer as a buyer’s agent, but the buyer refuses representation. Based on these facts, which of the following statements best describes this situation?
- A. The seller is the licensee’s client, and the buyer is her customer.
- B. Both the seller and the buyer are the licensee’s customers.
- C. The licensee owes the same duties to both the seller and the buyer.
- D. The buyer is the licensee’s client, and the seller is her customer.
Question 11
A listing agent presents a signed offer to a seller who then changes the amount of the down payment. Before presenting the counteroffer to the buyer, the New Jersey Real Estate License Law requires the listing agent to
- A. obtain the consent of the listing broker.
- B. secure the seller’s initials confirming the revision.
- C. prepare a separate addendum that reflects the revision.
- D. verbally inform any buyer’s agent of the proposed revision.
Question 12
Which of the following is a permitted free offering?
- A. A complimentary home warranty with every listing
- B. A coupon for discounted commission on listing services
- C. A free dinner for attendees at a homebuyers’ evening seminar
- D. Free use of a local moving van for all listings
Question 13
The statute of frauds requires that for certain contracts to be enforceable, they must be
- A. witnessed.
- B. recorded.
- C. notarized.
- D. written.
Question 14
May a New Jersey real estate licensee decline to cooperate with other New Jersey licensees?
- A. Yes, if the client directs the licensee according to New Jersey regulations.
- B. Yes, if the client gives verbal direction not to cooperate.
- C. Yes, if the broker directs the salesperson not to cooperate.
- D. No; licensees are required to cooperate under all circumstances.
Question 15
A prospective purchaser wants to see if there is a recorded notice that a certain property may be involved in litigation. The buyer would look for the
- A. lis pendens.
- B. tax certificate.
- C. recording statutes of that state.
- D. special assessments.
Question 16
Employment agreements between salespersons and their employing brokers must include the
- A. amount of notice of termination that the broker is required to give the salespersons.
- B. rate of commissions to be paid to the salespersons upon termination of employment.
- C. amount of notice of termination that the salespersons are required to give the broker.
- D. period of time after termination during which the salespersons are prohibited from opening their own offices.
Question 17
A Comparative Market Analysis performed by a real estate agent for a seller is a comparison of
- A. past real estate appraisals.
- B. appraisal feasibility studies.
- C. median property values in the seller’s market.
- D. recently sold homes similar to the seller’s property.
Question 18
When a salesperson takes a listing, the salesperson must make a reasonable effort to ascertain all of the following EXCEPT
- A. the nature and condition of the heating system.
- B. the presence of severe cracks in the foundation.
- C. the existence of a seepage problem in the basement.
- D. the occurrence of a suicide in the property within the past year.
Question 19
Two days after closing, the seller gives a $500 bonus check to the selling agent. The agent should
- A. immediately deposit the check in a savings account.
- B. instruct the seller to issue the check to the agent’s broker.
- C. cash the check and give the broker a share of the bonus.
- D. instruct seller that bonuses should be in the form of an electronic transfer.
Question 20
The Freshwater Wetlands Protection Act of 1987 is a New Jersey law that:
- A. requires environmental impact statements to be filed with the New Jersey Department of Environmental Protection before title to developed real estate can be transferred
- B. restricts development of real estate in certain designated areas
- C. empowers the New Jersey Department of Environmental Protection to acquire title to certain real estate for less than its fair market value through condemnation
- D. requires the registration of residential development projects with the New Jersey Department of Community Affairs
Question 21
How does accretion result in acquisition of title?
- A. The owner acquires land through natural causes such as the accumulation of soil.
- B. The owner acquires title through the legal process of eminent domain.
- C. The owner loses title due to the gradual wearing away of land by water.
- D. The owner acquires title by taking open and notorious possession of a property.
Question 22
A joint tenant can dispose of their interest in real property by all of the following EXCEPT:
- A. selling the interest to a third party
- B. giving the interest away as a gift
- C. leasing the interest to a tenant
- D. disposing of the interest in a will
Question 23
When filling in a purchase agreement, what can a licensee legally do?
- A. Draft original legal clauses for the buyer.
- B. Provide legal advice on how to take title.
- C. Fill in the blanks on a pre-printed form approved by legal counsel.
- D. Alter the commission structure without the broker’s consent.
Question 24
The recording of an instrument in the public records gives:
- A. actual notice
- B. constructive notice
- C. inquiry notice
- D. certified notice
Question 25
How could the state acquire title to a property when the owner dies with no heirs and no will?
- A. adverse possession
- B. condemnation
- C. escheat
- D. foreclosure
Question 26
What happens to the property value if a new high-speed highway is built right next to a quiet residential neighborhood?
- A. The value increases due to better accessibility.
- B. The value decreases due to external (economic) obsolescence.
- C. The value remains the same because the house structure is unchanged.
- D. The value increases because of the principle of progression.
Question 27
What is the name of the process of consolidating two separate lots into one larger one to increase total value?
- A. attachment
- B. appurtenance
- C. assemblage
- D. avulsion
Question 28
Which of the following would NOT be considered a cause of depreciation?
- A. functional obsolescence
- B. physical deterioration
- C. economic obsolescence
- D. unimproved land
Question 29
What factor generally has the greatest effect on real estate value?
- A. The cost of the materials used.
- B. The age of the structure.
- C. The demand of people and the location.
- D. The original purchase price.
Question 30
What is the most reliable method of appraisal for residential real estate?
- A. Sales comparison approach
- B. Cost approach
- C. Income capitalization approach
- D. Gross rent multiplier
uestion 31
In its advertisements, a New Jersey real estate company may NOT:
- A. list the salespersons’ names in the advertisement
- B. include the term “agency” in a description of the company
- C. include the home phone number of a licensee if it is identified as such
- D. abbreviate its regular business name
Question 32
A licensee plans to email information regarding an open house for a listing. In addition to complying with state-specific requirements for advertising, which of the following must also be included in the email?
- A. a provision to opt-out of future emails
- B. who provided the recipient’s name
- C. complete property description
- D. property owners’ names
Question 33
A licensee leases space in an office complex. The lessor requires the licensee to pay monthly rent plus a portion of the building’s taxes and operating expenses based on the number of square feet occupied. Which of the following types of leases does the licensee have?
- A. gross
- B. percentage
- C. triple net
- D. net
Question 34
A home warranty offered to a purchaser on the condition that the purchaser sign a contract to buy a listed property may be paid for by the:
- A. listing broker
- B. selling broker
- C. seller
- D. listing salesperson
Question 35
The function of the FHA is to
- A. insure loans on real property made by approved lending institutions.
- B. insure mortgagors’ real property against physical hazards.
- C. build government subsidized housing.
- D. lend money to buyers of properties occupied by one to four families.
Question 36
Which of the following establishes the validity of a listing agreement?
- A. written contract
- B. the broker’s policy manual
- C. customary practice
- D. an agency disclosure statement
uestion 37
When evaluating possible tenants, a property manager is legally permitted to ask about
- A. the number of family members living in the property.
- B. physical disabilities that might make a unit less desirable.
- C. criminal convictions for the sale of illegal drugs.
- D. past use of alcohol by tenants.
Question 38
A property is listed for $5.5 million. A buyer submits an offer for $5.2 million. While the seller is considering the offer, another buyer submits an offer for $5.4 million. Which of the following is true?
- A. The seller must reject the first offer before considering the second.
- B. The seller can accept either offer, or reject both offers.
- C. The seller must accept the highest offer.
- D. The seller can accept both offers.
Question 39
Broker P, a sole proprietor, dies. Which of the following is true regarding the status of the firm’s license?
- A. All sales contracts are declared null and void.
- B. The Real Estate Commission will direct an experienced broker from another firm to complete the pending contracts.
- C. The most experienced salesperson in the firm is automatically granted the right to act as the broker for up to 30 days.
- D. A salesperson holding a real estate license for at least three years can apply for a temporary broker’s license in order to continue the firm’s activity.
Question 40
A buyer’s agent is asked by the buyer if a house has a new roof. The agent, who has not spoken to the seller or checked the property disclosure, says “Yes, the house has a new roof in the last 10 years.” After the purchase, it is discovered the roof is 25 years old and needs replacement. Is the licensee subject to disciplinary action?
- A. Yes, because the licensee has misrepresented the property.
- B. No, because the licensee should have referred the third party to the seller for the answer.
- C. No, because the seller should have informed the licensee of the age of the roof.
- D. No, unless the licensee and the seller conspired to mislead the third party.
Question 41
A real estate licensee is acting as a property manager for a friend. The friend has to leave the country for a period of time and leaves the licensee in charge of finding a new tenant for an apartment and collecting the rent. The licensee finds a tenant who pays the security deposit and the first month’s rent. Which of the following is the proper course of action for the licensee?
- A. Deposit the funds in the friend’s bank account.
- B. Deposit the funds in the broker’s trust account.
- C. Wait until the friend returns to deliver the funds.
- D. Deposit the funds in the licensee’s personal checking account.
