Real Estate Licensing New Jersey Real Estate Salesperson Exam Questions Instant Access

Question 1

A licensee must provide disclosure of licensed status when acting as a principal if

Athe agent of the other party asks about this specifically.

Bthe licensee does not have errors and omission insurance.

Cthe licensee has any economic interest in the property.

Dany relative of the licensee has ever lived in the residence.

Answer : C

Under N.J.A.C. 11:5-6.4, any licensed New Jersey real estate broker, salesperson, or broker-salesperson must disclose in writing their licensed status when they have a direct or indirect ownership interest in property being sold, purchased, or leased. This is known as disclosure of economic interest.

The purpose of this regulation is to ensure the public is fully aware that they are dealing with a licensed real estate professional, who may have specialized knowledge or influence in the transaction. Disclosure must appear in the contract of sale, lease, or any offer made.

Therefore, the correct answer is C, since a licensee must disclose whenever they have an economic interest in the property.

Question 2

A licensed broker may establish a commission rate at a predetermined amount that reflects the broker's general office policy provided the broker:

Ahas the percentage or fixed amount printed on all listing agreement forms

Badvises the New Jersey Consumer Affairs Division that the broker will not negotiate this commission rate

Cadvertises the commission rate at least once per month

Dnegotiates all commissions with sellers

Answer : D

Under New Jersey Real Estate Commission rules and antitrust law, commissions are always negotiable between the broker and the client. A broker may set a general office policy or customary rate, but legally the rate cannot be mandatory or fixed without negotiation. It must be negotiated in each listing agreement.

* Options A, B, and C would constitute unlawful practices or misleading advertising.

* Only D is correct: all commissions must be negotiated with sellers.

(Reference: NJ Real Estate Salesperson Pre-Licensure Course Study Guide, Commission Rates & Antitrust; NJAC 11:5 on advertising and business conduct.)

Question 3

A real estate licensee is a partial owner of a local inspection company. It is permissible for the licensee to tell all clients to use this company when:

Ait is in the best interest of the client

Bthe licensee does not know any of the other title companies in the area

Cthe client does not ask for other recommendations

Dthe licensee discloses the interest in the company to the client

Answer : D

Under RESPA Section 8 and NJREC rules:

A licensee with a financial interest in a related service company (e.g., inspections, title, mortgage) must provide full disclosure in writing to the client.

Without disclosure, this is considered a conflict of interest and a violation.

Disclosure allows the client to make an informed decision and choose alternatives.

Correct answer = D.

Question 4

A salesperson is selling a leased commercial property. What will happen to the lease after the sale is consummated?

AThe lease is assigned to the new owner.

BThe lease expires and the tenant must move.

CThe tenant and the new owner must negotiate a new lease.

DThe new owner has the option of canceling the lease or accepting the lease.

Answer : A

In New Jersey, under landlord-tenant law, a lease is considered a contract that runs with the land. When a property is sold while a lease is in effect, the new owner automatically assumes the rights and responsibilities of the landlord under the existing lease.

The tenant does not need to renegotiate and cannot be forced to vacate until the lease term expires, unless both parties agree otherwise. This transfer is known as an assignment of lease to the new owner.

Therefore, the correct answer is A.

Question 5

Which of the following statements correctly describes a standard feature of a buyer-agency agreement?

AA buyer-agency agreement is an option rather than an employment contract.

BA retainer fee is normally paid at the time the agreement is signed.

CThe source of compensation determines the agency relationship.

DIt establishes a fiduciary relationship with the buyer.

Answer : D

Under the New Jersey Real Estate Commission rules on agency disclosure and the Salesperson Study Guide (Chapter on Buyer Agency):

A buyer-agency agreement is a form of employment contract creating a fiduciary relationship between the buyer and the broker.

A is incorrect because it is not just an option; it's a binding agreement.

B may or may not be true --- a retainer fee is not required in NJ.

C is false because the source of compensation does not determine agency; agency is determined by the agreement and consent of the parties.

D is correct: a buyer-agency agreement creates fiduciary duties such as loyalty, disclosure, confidentiality, and obedience to the buyer.

Question 6

Which of the following actions is a function of a municipal planning board?

AApproving a variance for an addition to a garage on a residential property

BCreating a master plan for all the land in a particular county

CUnilaterally approving subdivisions in a jurisdiction

DPrescribing and controlling the development and use of all land in a municipality

Answer : D

A municipal planning board (sometimes called a planning or zoning board) has authority to:

Adopt and enforce the master plan for land use in the municipality.

Regulate subdivisions, site plans, and development approvals.

Control zoning ordinances and land-use policies.

Variances are typically handled by a zoning board of adjustment, not the planning board.

Counties adopt county-wide plans but do not govern municipalities.

Correct answer = D.

Question 7

Evergreen bushes and apple trees on a property that were planted by the current owner are examples of:

Areal estate

Bpersonal property

Cchattels

Dtrade fixtures

Answer : A

Natural attachments (trees, bushes, perennial plants) are part of the land and thus real estate.

Annual crops (emblements) are considered personal property.

Chattels = movable personal property.

Trade fixtures = items installed by a tenant for business use.

Correct answer = A.