New Jersey Real Estate Practice Exam

1.   Which of the following entries satisfies the requirement that an advertisement  show that the broker is in the real estate brokerage business?

A.   J. Jones Realty

B.   J. Jones, Real Properties

C.   J. Jones, Real Estate Agency

D.  J. Jones, Real estate Ventures

2.   A manager rents a unit to a tenant who later has a car accident and is confined to a wheelchair.

The tenant now wants the manager to lower all the light switches and install grab bars. Does the manager have to make these modifications?

A.   No, the tenant can modify the unit and deduct the cost from rent.

B.   No, the tenant can modify the unit at his expense and will be responsible for restoring the unit.

C.    Yes, because the landlord is responsible for keeping the units in a habitable condition

D.  Yes, but only if the term of the lease is for more than one year.

3.   According to the New Jersey Real Estate Licensing Law, what is the maintenance requirement for all records of real estate transactions?

A.   Files must be able to be reproduced on paper for review by the Commission. B.   Files must be kept on paper, and available for review for up to 10 years.

C.   Files must be submitted electronically to the Commission.

D.  Files must be kept on premises and available to the public at any time.

4.   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, the brother directs the salesperson not to cooperate

D.  No, licensees are required to cooperate under all circumstances.

5.   When MUST a listing broker provide a copy of a fully executed written listing agreement  to the owner?

A.   Upon execution of the listing agreement  by all parties.

B.   Within three days of execution of the listing agreement  by registered mail, return-receipt- requested.

C.   Within five business days of execution of the listing agreement. D.  At the time of presentation of a written offer.

6.   Which of the following actions is NOT a cause for suspension or revocation of a New Jersey real estate license?

A.   Failing to provide a client with a copy of the signed exclusive listing contract.

B.   Delivering  a consumer information statement to a seller after having made a listing presentation

C.    Payment of a referral fee by a licensed NJ broker to a broker licensed in another state.

D.  Collecting a commission as a broker from both parties to a transaction while representing both parties as their agent.

7.   Under what conditions may a salesperson accept a bonus offered by a seller for services rendered?

A.   The salesperson receives payment directly from the seller. B.   The salesperson has broker’s approval.

C.    The seller pays the bonus to the broker, who passes it on the salesperson. D.  Under no circumstances.

8.   Under the New Jersey Real Estate Licensing Law, which of the following is an unlicensed assistant or secretary NOT permitted to do?

A.   Type contracts for approval.

B.   Make telephone calls to request rent payments. C.   Follow up on Loan applications with lenders.

D.   Place Signs on properties.

9.   At a listing appointment,  the seller asks the broker not to disclose the prior termite treatment and repairs since they are now corrected. The broker should

A.   Go back to the office without pursuing the listing.

B.   Insist that the seller disclose these facts to any potential purchaser.

C.    Agree not to disclose these issues, as they no longer affect the property.

D.  Confirm that repairs were made, and the extent of those repairs before agreeing.

10. Which of the following statements concerning an agreement  of sale prepared by a licensee in accordance with New Jersey License Law is correct?

A.   The agreement  must contain a mortgage contingency clause. B.   The agreement  must include an Attorney Review Clause.

C.    The buyer must be given three-day right of rescission.

D.  The contract must include the attorney general’s memorandum on discrimination.

11. In estimating the value of a 50-unit apartment complex, which of the following approaches would yield the most accurate estimate?

A.   Cost approach

B.   Income approach

C.    Market data

D.  Gross rent multiplier

12. A secretary in a real estate office who does NOT have a real estate license may, A.   Review the consumer information statement with a prospective buyer.

B.   Perform bookkeeping functions concerning escrowed funds.

C.   Sign escrow checks with the written authorization of the broker. D.  Disclose the current status of a commercial listing.

13. Written offers to purchase real estate in New Jersey must be presented  to seller within

A.   24 hours B.   48 hours C.    3 days

D.  7 days

14. A seller wants $120,000 for his home, and still owes $20,000 of his original loan at 7%. The current interest rate is 12%. A buyer can pay $60,000 down and wants to carry a mortgage that includes the seller’s $20,000 existing mortgage and the remaining $40,000 for a total of $60,000 at an interest rate of 10%. What kind of mortgage loan is this?

A.   Blanket. B.   Equity

C.    Wraparound

D.  Buy-down

15. The IRS allows a married couple who sell their long-time home to take a tax-free capital gain of up to

A.   $125,000

B.   $250,000

C.    $500,000

D.  Any amount

16. Once an offer to purchase is presented  to a seller the

A.   Buyer is bound to the terms contained there in until the delivery of its acceptance. B.   Property is unavailable to any other prospects.

C.   Offer may be withdrawn at any time prior to deliver of its acceptance

D.  Seller may not consider any other outstanding offers.

17. The broker has noticed that a great number of people who are buying in the neighborhood where his listing is located speak Russian. He also noticed that an attractive feature of the neighbored seems to be the large Russian grocery store. He decides to stop advertising the

property in the city newspaper and instead advertise the property on two different Russian internet sites. This is

A.   Acceptable because it is not print media.

B.   Unacceptable due to its discriminatory nature.

C.    Acceptable if the advertisement  includes no preferential language. D.  The only appropriate way to market property in the neighborhood.

18. A seller’s Property Disclosure form states that there are no known material defects with the property, but the listing licensee is aware of asbestos wrapped duct pipes in the basement. The licensee should

A.   Disclose the existence of asbestos to all potential buyers.

B.   Ask the seller’s permission to disclose and abide by the seller’s wishes

C.    Suggest the buyers have a home inspections and leave discover up to the inspector.

D.  Suggest to the seller that he wrap the pipes to contain potential airborne contamination.

19. Which of the following  is NOT an example of a fixture?

A.   Antique chandelier. B.   Hot water heater.

C.   Heirloom  rosebush.

D.  Cast iron garden bench.

20. Which of the following statements about branch offices is INCORRECT?

A.   The name of the branch office supervisor must be recorded with the commission. B.    A licensed broker-salesperson must supervise the office on a full-time basis.

C.   Two salespersons may be designated to share supervising responsibilities.

D.  The employing broker is ultimately responsible for all licensees employed at the branch office.

21. A real estate broker has a fiduciary responsibility to her client and her responsibilities include investigating financial references, ordering and examining credit reports, and familiarity with the ADA Title. This broker is most likely working for the client as

A.   An affiliate

B.   An escrow officer

C.    A property manager

D.  A designated broker

22. In New Jersey, the Private Well testing ACT (PWTA) requires

A.   The buyer to order the test.

B.   The selling broker to recommend sources of remediation.

C.    The buyer and seller to certify receipt of test results before title transfer. D.  The seller to remediate if the well fails the test

23. In jurisdiction where a seller’s property condition disclosure is required, the licensee is responsible for

A.   Completing the property condition disclosure.

B.   Ensuring that the seller complete the property condition disclose before closing.

C.   Ensuring  that the buyer received the property disclosure before the contract is finalized.

D.  Checking the disclosure for accuracy and ensuring that the buyer receives it before closing.

24. According to the NEW Jersey Real estate License Law, employment agreements  between salesperson and brokers MUST include which of the following provisions?

A.    A clause outlining the compensation to salespersons in the event that their employment is terminated.

B.    A clause requiring the salesperson to purchase errors and omissions insurance coverage. C.    A clause confirming the salesperson’s status as an independent contractor

D.  An attorney review clause stating that it is the broker’s option to hire an attorney in order to protect the broker’s rights.

25. New Jersey Real Estate Commission regulations require a licensee to terminate membership in a real estate board or multiple listing service whenever the organization

A.   Suggest uniform commission rates among all member brokers B.   Lobbies against legislation that the licensee personally favors C.    Charges dues that the licensee feels are excessive

D.  Advocates rules, practices, and standards with which the licensee does not agree.

26. A seller's agent is contacted by a potential buyer whose financial status is questionable. When asked to write an offer, the agent should

A.   Refuse tow rite the offer. B.   Insist on a prompt closing.

C.   Rask for a high earnest money payment. D.  Relay any reservations to the seller.

27. A broker who charges or collects an advance fee in excess of $25 for services to be rendered

MUST

A.   Deduct the amount collected from the commission or settlement.

B.   Give the principal receipts for all expenditures.

C.   Furnish within ninety days of its collection an accounting of how the money was used.

D.  Retain the difference between the amount of money collected and the amount spent.

28. Minors are held liable for real estate contract obligations if the

A.   Are at least 16 yrs if age.

B.   Have the contract notarized. C.   Graduated from high school. D.  Have their guardian co-sign.

29. 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.

30.  An individual is hired by the homeowners’ association of KLM Condominiums. The individual is not required to be a real estate licensee in New Jersey UNLESS the individual engages in which of the following activates?

A.   Collecting  the monthly association membership fees. B.   Negotiating a contract with a security service

C.    Retaining a landscaping service

D.  Soliciting tenants for vacant rental units.

31. Which disclosure is the most commonly required in a residential real estate sale?

A.   Radon

B.   Lead-based paint

C.    Neighborhood Composition

D.  Seller’s property disclosure

32. According to the CAN SPAM ACT, every email advertisement  for real estate services must do all of the following EXCEPT?

A.   Clearly indicate the nature of the content of the email

B.   Inform the recipient of the name and locations of the brokerage firm.

C.   Allow a method for the recipient to opt out and not receive future emails.

D.  Advised the recipient that it will take 180 days to remove the recipient’s name from the email list.

33. Which of the following property valuation estimates or reports would have to be prepared by a licensed or certified appraiser?

A.   A broker’s price opinion

B.   A comparative market analysis

C.   A reconciliation report for an FHA loan

D.  A value analysis for a non-residential property valued below $250,000

34. The purchase price for a new home was $230,000. The buyer put down 20%, and the balance was a mortgage for 80% of the purchase price. The appraised value at the time of closing was

35. Depreciation usually applies to

A.   The building only. B.   The land only.

C.    Both the land and the building.

D.  Income obtained from the building.

36. A lender whose mortgagor has defaulted may be offered a deed in lieu of foreclosure. if he accepts, which of the following will be TRUE?

A.   Because it is voluntary, it will not be an adverse item on the buyer’s credit.

B.   The lender will usually retain his rights under mortgage insurance or VA guarantee. C.    The lender will take title subject to any junior liens

D.  The loan will still be assumable.

37. A neighborhood grocery store no longer complies with the law because a new zoning ordinance is adopted so that the property is zoned for residential use. Nevertheless, the owner is allowed to continue to operate the grocery store. This is an example of

A.    A Variance

B.   Nonconforming use

C.    Spot zoning

D.  A Conditional-use permit

38. A property was listed with a broker, but the owners advertising the property found a buyer and negotiated the sale themselves. After the closing, the owners paid a full commission to the broker. The broker MUST have had

A.   An open listing.

B.   An exclusive agency listing.

C.   A net listing

D.  An exclusive right to sell.

39. Which of the following are MOST likely to be addressed by building codes?

A.   Deed restrictions.

B.   Construction standards.

C.   Permissible use of structures.

D.  Restrictive covenants.

40. Under New Jersey Real Estate Commission rules, a licensee's obligations to the public include all of the following responsibilities EXCEPT

A.   Accepting any reasonable commission offered by a seller in the course of negotiating a listing agreement

B.   Dealing honestly with all parties

C.   Disclosing material defects in a property to a prospective purchaser

D.  Protecting and promoting the interested of the licensee’s principal when acting as an agent.

41. A seller places his property on the market for sale at a certain price. A buyer sees the property and makes a written offer to purchase that is 90% of the asking price. The seller rejects that offer, but states that he will accept an offer of 95% of the original asking price. The buyer rejects that counteroffer. The original offer is

A.   Rescinded

B.   Null and void

C.   Irrevocable

D.  Binding

42. The buyer was given a Loan Estimate at the time of the application for the mortgage and it is now three business days before the closing. The appraisal and the Closing Disclosure have been given to the buyer. The buyer's broker meets her client at the property for a walk-through and to review the documents. Which of the following occurrences will result in the buyer having the right to an additional three days to review the documents?

A.   There was a mathematical error on the proration of taxes or utilities.

B.   Appliances are missing even though the seller agreed to include them.

C.    The load product was changed from a fixed rate to once that is adjustable.

D.  There was an omission in the property disclosure of a recently discovered special assessment.

43. A seller is offering his property for sale in as-is condition. A buyer enters into a contract with the seller and has the home inspected. The inspection reveals a latent defect known, but not disclosed by the seller. The buyer

A.   Can void the contract due to the sellers failure to disclose the latent defect.

B.   Can reduce the contract sales price by the cost of correcting the defect.

C.    Must go through with the purchase because the house is being sold as is. D.  Can force the seller to correct the defect.

44. A salesperson’s client is the lessee. Who does the salesperson represent?

A.   Lender

B.   Tenant

C.    Landlord

D.  Lien holder

45.  A building  was purchased for $350,000 with 20% down payment. If the lender charged the buyer three discount points, how much will the buyer need to cover these two items?

46. The seller has entered  into an exclusive right to sell agreement with Terry Hill. Ms. Hill presents the seller with an offer to purchase which is 20% less than the list price. Which of the following is appropriate?

A.   The seller s obligated to pay Ms. Hill a commission or the offer price if the seller rejects the

offer.

B.   The seller is under no obligation to accept the offer or make a counteroffer.

C.    The seller has 72 hours to submit a counteroffer or else the offer is considered to be accepted.

D.  The seller is obligated to make a counteroffer to the buyer if the offer is unacceptable.

47. Which of the following statements regarding the American with Disabilities ACT is true?

A.    A landlord must make reasonable accommodations for those with disabilities. B.    A seller must make reasonable accommodations for those with disabilities.

C.    A lender must make loans to those with disabilities

D.  A buyer can require a seller to make structural changes before closing.

48. An order for payment from the Real Estate Guaranty Fund issued as a result of conduct by a licensee will result in a

A.   Minimum  five-year renovation of license.

B.   Automatic revocation of license with no eligibility for reinstatement until the fund is reimbursed.

C.   Minimum  $5,000 fine

D.  Automatic suspension of license for a minimum of one year with no eligibility for reinstatement until the fund is reimbursed.

49. A real estate licensee representing a buyer may do all of the following EXCEPT A.   Disclose the seller’s motivation for selling.

B.   Identify latent property defects.

C.    Prepare a Competitive Market Analysis (CMA)

D.  Disclose the highest price the buyer is willing to pay.

50. Ted and Carol want to buy a house that is listed for $105,000. The seller accepts the odder they wrote for $5,000 less than list price. They have 20% DOWN PAYMENT AND NEED TO GET AN 80% loan to value mortgage. Their lender offers them a 30 yr mortgage at 5.5% Interest. The taxes are

$1,494 per year. How much is their monthly payment? BE SURE TO USE THE AMORTZATON

TABLE.

51. Which of the following is used in the cost approach when estimating the value of improvements?

A.   The assessed value of the property including the land

B.  How much it would cost to build a similar building at today’s cost

C.  The price per square foot of comparable properties

D.  Location, available financing, and depreciation

52. Broker A has created an extremely aggressive business model which has allowed for a very quick success in the market. The other brokers in the market area have decided not to allow Broker A to show their listings or show Broker A’s listings.  This would violate

A.   Regulation Z

B.   The Sherman Antitrust Act

C.  The Real estate Boycott Act

D.  The Real Estate Settlement Procedures Act

53. In many states, usury laws

A.   Determine the possible legal use of land

B.   Provide a right to use property belonging to another

C.  Impose a tax on a purchaser of personal property resale or use

D.  Establish a maximum rate of interest allowed for loans

54. Federal rules require a Closing Disclosure document provided by the lender. The broker should counsel the borrower to review this document and compare it with the Loan Estimate document. The Closing Disclosure should be received by the borrower

A.   At the closing of the transaction

B.   At least 3 days prior to loan consummation

C.  Not later than 30 days following the loan consummation

D.  Not later than 10 business days following loan application

55. A prospective tenant who is hearing impaired is looking at an apartment in an 8-unit building and wishes to install a doorbell that does not ring, but flashes a bright light. The landlord must

A.  Allow the tenant to make the modification at his own expense

B.   Charge an additional monthly fee for the modification

C.  Make the modification at the landlord’s expense

D.  Not allow the tenant to make the modification

56. Which disclosure is the most commonly required in a residential real estate sale?

A.   Radon

B.   Lead-based paint

C.  Neighborhood composition

D.  Seller’s property disclosure

57. A licensee just attended  a class on using social media to further her real estate sales career. She was so excited about the class that she immediately came home and signed up for Facebook, Twitter and Linkedln. She has chosen a listing to market via social networking, a residence recently built to resemble an antebellum mansion. Which of the following words or phrases may she lawfully include in her advertising?

A.   Updated antebellum

B.   Antebellum mansion

C.  Antebellum style mansion

D.  Beautiful “antebellum “ estate

58. The lead paint addendum that must be presented  with the purchase and sale contract for certain older homes will

A.   Require the removal of all lead paint prior to the closing

B.   Provide the buyer with the opportunity to waive the right to a lead paint inspection

C.  Mandate that sellers remove any lead paint only on interior walls

D.  Make the sellers liable for any of the buyers lead-related medical problems

59. Which of the following would a broker examine to get a summary of ownership history, liens, and encumbrances on a piece of real property?

A.  Chain of title

B.   Abstract of title

C.  Certificate of title

D.  HOA Disclosure packet

60. Which of the following is true of a quitclaim deed?

A.   It cannot be used to transfer a title held in fee simple

B.   It has warranties similar to a special warranty deed

C.  It can be used to remove a cloud on a title

D.  It cannot be recorded

61. What does the mortgage lender most often rely on when deciding how much is safe to land on a parcel of real estate?

A.   Market analysis

B.  Sales contract

C.  Appraisal report

D.  Assessor’s determination

62. Which of the following items would be prorated at closing with the credit going to the seller?

A.   Accrued interest on an assumed mortgage

B.   Prepaid property taxes

C.  Earnest money

D.  Unearned rent collected in advance

63. A residential developer desires to limit all construction in a subdivision to single-family houses of at least 3,000 square feet. Which of the following is the BEST way for the e- developer to ensure this will take place?

A.   Have an architectural review committee approve building pians.

B.   Establish a homeowner's association. C.  Petition for a zoning change.

D.  Create deed restrictions.

64. A lender whose mortgagor has defaulted may be offered a deed in lieu of foreclosure. If he accepts, which of the following will be TRUE?

A.   Because it is voluntary, it will not be an adverse item on the buyer's credit. B.   The lender will take the title subject to any junior liens.

C.  The lender will usually retain his rights under mortgage insurance or VA

guarantee.

D.  The loan will still be assumable.

65. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if

A.   It satisfies or exceeds all terms included in the counteroffer. B.   The owner withdraws the counteroffer before it is accepted.

C.  The owner gives the first buyer notice that another offer was received and an opportunity to revise the bid.

D.  The first buyer is informed, in writing, of the owner's intent to accept another offer.

66. Commercial property listing agents ensure owners comply with: A.   Their fiduciary duties to the tenants

B.   State and Federal Fair Housing

C.  American Disability Act

D.  Market Lease Rates

67. A residential developer desires to limit all construction in a subdivision to single-family houses of at least 3,000 square feet. Which of the following is the BEST way for the e- developer to ensure this will take place?

A.   Have an architectural review committee approve building pians. B.   Establish a homeowner's association.

C.  Petition for a zoning change. D.  Create deed restrictions.

68. A Seller has required that the buyer must use his title insurance company. The seller has been told that if the buyer uses the title company, they will pay part of his real estate commissions, increasing his net proceeds from the sale. Is this a legally permissible arrangement?

A.  This is illegal according to RESPA

B.  This is illegal according to Regulation Z

C.  This is permissible if the buyer was receiving a VA Loan

D.  This is permissible if no fee is paid directly to the seller

69. Which of the following differentiates a bilateral contract from a unilateral contract?

A.   Number of parties involved

B.   Performance obligations of the parties

C.  Relative value of the object of the contract

D.  Type of property specified in the contract

70. Which is TRUE regarding an option agreement?

A.   The buyer must purchase the property at some future time

B.   The seller agrees to sell at a fixed price within a stipulated time

C.  The buyer is give the privilege of occupying the property

D.  Any payments are refunded should the buyer fail to perform on the agreement

71. A broker who has brought a ready, willing, and able buyer to a seller who agrees to the terms of a sales contract:

A.   Earns a commission at that point

B.   Earns a commission even if the contingencies in the contract have not been met. C.  Does not earn commission unless the sale closes

D.  Does not earn commission

72. If the buyer and seller agree to rescind the contract if a deed created in tenancy in common does not state the fractional interest of each co owner it:

A.   Presumed each owner has an equal interest

B.   Becomes a joint tenancy

C.  Must be determined by a majority vote of the tenants

D.  Is Void

73. A private integrated club refused to rent one of its condos to a minority family. The club explained that it did not rent the condos to the public since the condos were for members only. Is the club in violation of the federal fair housing act and if so how?

A.   Yes, when race is involved, there are no exception of the federal fair housing act. B.   Yes, Since the club has minority member, they were not exempt from the fair

housing act.