Free New Jersey Real Estate Practice Exam

Q1.Who may a designated broker authorize to sign or transfer funds from a PM trust account under the statutory conditions?

• A.Any outside vendor
• B.A licensee or qualifying unlicensed natural person directly employed by the PM firm
• C.Any tenant who pays rent
• D.Only the property owner

Q2.A New Jersey real estate team operating under a broker's license wants to run digital advertisements using only the team name 'Elite Realty Group' without prominently displaying the supervising broker's trade name. Under N.J.A.C. 11:5-6.4, which statement is CORRECT regarding this advertising practice?

• A.This is permissible as long as the team name does not include the word 'Realty,' which is reserved for licensed brokerages.
• B.This is permissible because team names are treated as independent brands under New Jersey advertising regulations.
• C.This is a violation because all advertising by a team must prominently display the licensed name of the supervising broker or brokerage in a clear and conspicuous manner.
• D.This is permissible provided the team registers its name with the New Jersey Real Estate Commission as a separate business entity.

Q3.A designated agent representing a seller discovers that the buyer's Truth-in-Lending disclosure shows an APR significantly higher than what was initially quoted. Under federal law and fiduciary duty principles, what action should the agent take?

• A.Inform only the seller since the agent represents the seller's interests
• B.Suggest the buyer review the disclosure carefully as the APR appears inconsistent with initial quotes
• C.Remain silent as loan terms are between buyer and lender
• D.Advise the buyer to accept the terms to avoid delaying closing

Q4.A salesperson representing a buyer discovers that the seller has not disclosed a known underground storage tank (UST) on the property. Under CERCLA (the Comprehensive Environmental Response, Compensation, and Liability Act), which statement best describes the potential liability for the buyer if they purchase the property without addressing this issue?

• A.The buyer bears no liability because CERCLA only holds the party who caused the contamination responsible.
• B.The buyer may be held liable as a current owner or operator of the site regardless of who caused the contamination, unless they qualify for the innocent landowner defense.
• C.The buyer is protected from all CERCLA liability because the seller failed to make the required disclosure.
• D.CERCLA liability is limited to commercial properties, so a residential buyer faces no environmental liability under this law.

Q5.A property was the site of a methamphetamine laboratory that was properly remediated according to state standards. The current seller was never involved in the drug activity and purchased the property after remediation was completed. What is the seller's disclosure obligation regarding this information?

• A.No disclosure required since the property was properly remediated
• B.Must disclose as it may affect the property's value or desirability
• C.Must disclose only if specifically asked by the buyer
• D.Disclosure prohibited as it would constitute housing discrimination

Q6.During a listing presentation, a homeowner asks a salesperson whether the neighborhood's racial composition has been changing, implying they want to know if minorities are 'moving in.' The salesperson responds by providing detailed demographic statistics about racial changes in the area. Which prohibited practice does this most likely constitute?

• A.Redlining
• B.Blockbusting
• C.Steering
• D.Puffing

Q7.Under the Truth in Lending Act (TILA), what document must lenders provide to borrowers that discloses the true cost of credit, including the annual percentage rate (APR)?

• A.Loan Estimate
• B.Closing Disclosure
• C.Truth-in-Lending Disclosure Statement
• D.HUD-1 Settlement Statement

Q8.Sofia represents a seller whose property has been on the market for 4 months. A buyer's agent asks, 'Is the seller motivated to sell quickly?' What should Sofia do?

• A.Disclose the seller's motivation since the market exposure is already public knowledge
• B.Decline to share confidential information about the seller's motivation — it is protected under the duty of confidentiality
• C.Confirm the seller is motivated to help close the deal faster
• D.Refer the buyer's agent directly to the seller for this information

Q9.A New Jersey salesperson is found to have deliberately misrepresented the square footage of a listed property to a buyer. Under the New Jersey Real Estate License Act (N.J.S.A. 45:15-1 et seq.), which of the following consequences may the New Jersey Real Estate Commission (NJREC) impose?

• A.Issue a written warning only, since a first offense cannot result in license suspension
• B.Suspend or revoke the salesperson's license and impose a monetary penalty
• C.Refer the matter solely to the county prosecutor with no disciplinary authority of its own
• D.Require the salesperson to retake the licensing examination before any discipline is issued

Q10.A licensee wants to advertise with a nickname. What is the soundest instruction?

• A.A nickname is always forbidden.
• B.Use a name carried or authorized on the license record under R4-28-301(D), while satisfying brokerage-name rules.
• C.Any nickname is allowed if popular.
• D.Only the team leader decides.

Q11.A real estate brokerage provides in-house title insurance through an affiliated title company. Under RESPA, the brokerage may lawfully receive a portion of the title insurance premium paid by the buyer if which condition is satisfied?

• A.The affiliated business arrangement (AfBA) is disclosed to the buyer in writing at or before the time of referral, the buyer is not required to use the affiliated title company, and the payment reflects an actual ownership interest return rather than a fee for the referral itself.
• B.The total title insurance premium charged does not exceed the rate filed with the state insurance commissioner, which alone satisfies RESPA's anti-kickback provisions regardless of disclosure.
• C.The brokerage obtains written consent from the seller, because RESPA's affiliated business arrangement rules apply only when the seller selects the settlement service provider.
• D.The payment is permissible without any special disclosure so long as it is made after closing, because RESPA Section 8 only regulates payments made prior to or at settlement.

Q12.Under the New Jersey Real Estate License Act, which statement is TRUE regarding the enforceability of a real estate broker's claim for a commission?

• A.A broker may recover a commission based on an oral listing agreement if there are witnesses to the agreement
• B.A commission is enforceable only if the listing or buyer representation agreement was in writing and signed by the party to be charged
• C.A broker is entitled to a commission whenever a ready, willing, and able buyer is procured, regardless of whether a written agreement exists
• D.A salesperson may independently sue a seller for commission if the broker refuses to pursue the claim

Q13.A New Jersey licensee is advertising a property on a personal social media page under the team name 'The Sunrise Team.' Which of the following is required by New Jersey advertising rules?

• A.Only the team name needs to appear since team names are registered with the New Jersey Real Estate Commission
• B.The advertisement must also prominently display the name of the employing broker or brokerage firm
• C.The salesperson's personal license number must appear in every social media advertisement
• D.Team advertising on social media is prohibited unless the team has its own broker's license

Q14.Under general agency law principles, which of the following actions by a salesperson would be considered a breach of fiduciary duty to their seller-client?

• A.Presenting all offers to the seller, including a low offer
• B.Telling the buyer that the seller is highly motivated and will accept far less than the listing price
• C.Marketing the property on multiple listing platforms to attract more buyers
• D.Advising the seller to make minor repairs before listing the property

Q15.What is the key difference between a mortgage pre-qualification and a mortgage pre-approval?

• A.Pre-qualification involves a hard credit pull; pre-approval uses only a soft inquiry
• B.Pre-qualification guarantees the loan amount; pre-approval is only an estimate
• C.Pre-qualification is required by Arizona law; pre-approval is optional
• D.Pre-qualification is an informal estimate based on self-reported data; pre-approval involves verified income, assets, and credit