New Jersey Real Estate Salesperson Practice Test

Answer choices

1. A. Two points equal 2% of the loan amount, so the charge is $6,000.
2. B. Two points equal $2,000 because each point always has a fixed $1,000 value.
3. C. Two points reduce the principal balance by 20% before closing.
4. D. Two points equal 2% of the purchase price regardless of the loan amount.

Wrong-answer review

• B. Two points equal $2,000 because each point always has a fixed $1,000 value.: Incorrect for this fact pattern. This choice conflicts with the controlling principle for discount points. One point equals one percent of the loan amount; two points on $300,000 equal $6,000.
• C. Two points reduce the principal balance by 20% before closing.: Incorrect for this fact pattern. This choice conflicts with the controlling principle for discount points. One point equals one percent of the loan amount; two points on $300,000 equal $6,000.
• D. Two points equal 2% of the purchase price regardless of the loan amount.: Incorrect for this fact pattern. This choice conflicts with the controlling principle for discount points. One point equals one percent of the loan amount; two points on $300,000 equal $6,000.

Answer choices

1. A. Rescission is the recording of a deed after the contract has been fully performed.
2. B. Rescission seeks to terminate the contract and restore the parties substantially to their pre-contract positions.
3. C. Rescission means one party unilaterally rewrites the purchase price while all other terms stay effective, and no additional written amendment, consent, or contract analysis would be necessary.
4. D. Rescission is a financing clause that accelerates the unpaid mortgage balance.

Answer choices

1. A. The LLC automatically becomes a licensed brokerage as soon as the salesperson registers it with Treasury.
2. B. New Jersey prohibits every entity from receiving compensation connected with a salesperson.
3. C. Creating any LLC lets the salesperson collect commissions directly from buyers and sellers without broker involvement.
4. D. A properly registered entity may receive qualifying commission from the broker under N.J.A.C. 11:5-3.16, but the arrangement does not authorize direct consumer payment outside the broker.

Answer choices

1. A. The fund guarantees that every seller receives the original listing price if a buyer defaults.
2. B. The New Jersey Real Estate Guaranty Fund may provide statutory protection for qualifying losses arising from embezzlement, conversion, or unlawful obtaining of money or property.
3. C. The fund reimburses any market loss caused by a property declining in value after closing.
4. D. The fund is a mortgage-insurance program that pays lenders when borrowers stop making payments.

Answer choices

1. A. The indicated value equals NOI plus the annual debt service because mortgage payments are operating expenses, regardless of the property's actual income, condition, or comparable market data.
2. B. Direct capitalization multiplies NOI by the capitalization rate, producing an indicated value of $9,600.
3. C. The calculation should use gross scheduled rent without deducting operating expenses.
4. D. Direct capitalization estimates value by dividing NOI by the capitalization rate, producing an indicated value of $1,500,000.

Answer choices

1. A. Under P.L. 2024, c.32, the firm is deemed the buyer's agent by default when it performs brokerage services on behalf of the buyer absent an affirmative different designation.
2. B. No duties apply until the buyer makes an offer that the seller accepts.
3. C. The firm becomes a transaction broker by default in every transaction.
4. D. The firm is automatically the seller's agent because all listings control buyer relationships.

Answer choices

1. A. The broker loses all responsibility for advertising once the salesperson receives a Form 1099.
2. B. Tax classification does not convert the salesperson into an independently licensed broker; New Jersey broker-supervision requirements still apply to brokerage activity.
3. C. Independent-contractor status automatically authorizes the salesperson to hold client escrow in a personal account, and the brokerage would not need to document or correct the practice.
4. D. The salesperson may open a branch office without the broker because tax status controls license law.

Answer choices

1. A. The PCDS was repealed in 2024 and may not be requested by a brokerage.
2. B. The brokerage must obtain the signed PCDS required by P.L. 2024, c.32, and an unrepresented seller must provide it to the buyer before the buyer becomes obligated under a purchase contract.
3. C. A seller may substitute a verbal disclosure for the PCDS whenever the property appears well maintained.
4. D. The PCDS is required only after closing so it cannot influence the buyer's decision.

Answer choices

1. A. A seller may avoid all federal lead disclosure duties by selling the property as-is.
2. B. The buyer must waive the lead information if a home inspection is scheduled.
3. C. Lead disclosure rules apply only to homes built after 1978 because newer paint is more hazardous.
4. D. Federal lead law generally requires the seller and agents to provide required lead disclosures and the EPA/HUD pamphlet before the buyer is obligated under the contract.

Answer choices

1. A. Only a county recording office may discipline a real estate licensee for brokerage conduct.
2. B. The Commission may impose criminal prison sentences without referral to the courts.
3. C. The Commission may investigate only advertising complaints and has no authority over escrow misconduct.
4. D. The New Jersey Real Estate Commission may investigate and, after applicable process, impose sanctions such as fines, suspension, or revocation for proven violations.