New Jersey Real Estate Salesperson Exam

Misrepresentation & Advertising:

1. Which of the following statements would most likely be considered mere "puffing"?

• A. This area is expected to increase in value by 25% within the next year.
• B. This lot has the most beautiful view of the lake.
• C. Children from this neighborhood have the highest SAT scores.
• D. The utility costs in this home are lower than in any other home in the neighborhood.

Answer: B. "Puffing" refers to subjective opinion or exaggeration that cannot be objectively verified. Calling a view "the most beautiful" is a matter of opinion, while A, C, and D are factual claims that could constitute misrepresentation if inaccurate.

Financing Math — Points & Down Payment:

2. A buyer wants to purchase a home for $400,000 with a 15% down payment. The lender charges 1.5 points. How much money does the buyer need up front to make the purchase?

• A. $60,000
• B. $66,000
• C. $60,900
• D. $65,100

Answer: D. Down payment = 15% of $400,000 = $60,000. Loan amount = $340,000. Discount points = 1.5% of $340,000 = $5,100. Total cash needed = $60,000 + $5,100 = $65,100.

NJ License Law — Penalties:

3. A person who was previously found guilty of a rule violation is later found guilty of a subsequent rule violation. What is the MAXIMUM fine which may be imposed on the licensee for the additional violation?

• A. $500
• B. $2,000
• C. $5,000
• D. $10,000

Answer: D. Under N.J.S.A. 45:15-17, penalties for violations run up to $5,000 for a first offense and up to $10,000 for subsequent offenses.

Fair Housing:

4. A complainant in a discrimination case under the Federal Fair Housing Act MUST prove

• A. only that discrimination occurred.
• B. that discrimination occurred and was not provoked.
• C. that the accused party intended to discriminate.
• D. that damages occurred.

Answer: A. Under the Federal Fair Housing Act, discriminatory effect is sufficient to establish a violation — the complainant does not need to prove discriminatory intent or monetary damages.

Agency & Fiduciary Duty:

5. A buyer informs a listing salesperson that the buyer plans to subdivide the property and then list it with the salesperson as soon as the offer is accepted. The salesperson says nothing to the seller, and the offer is accepted. The salesperson's conduct violates NJ License Law because the salesperson failed to:

• A. advise the buyer that prior subdivision approval is required
• B. secure a signed brokerage agreement from the buyer before presenting the offer
• C. disclose to the seller a potential conflict of interest
• D. request that the salesperson's broker present the offer to the buyer

Answer: C. As the seller's agent, the listing salesperson owes fiduciary duties of loyalty and full disclosure. Failing to disclose the buyer's promise of a future listing creates an undisclosed conflict of interest.

Net-to-Seller Calculation:

6. A seller insists on netting $100,000 on the sale of a property. The seller will pay a 7% commission and all other closing costs, estimated at $1,850. What is the minimum price at which the property must be listed and sold for the seller to receive the $100,000?

• A. $101,850.00
• B. $104,942.78
• C. $108,850.00
• D. $109,516.13

Answer: D. Total net needed = $100,000 + $1,850 = $101,850. Since a 7% commission is paid, the net represents 93% of the sale price. Minimum sale price = $101,850 / 0.93 = $109,516.13.

Contract Law:

7. A seller receives a contract offer to buy her property. What will happen if the seller changes the title company named in the offer to the one where her sister works?

• A. If the buyer does not care, it is acceptable.
• B. A conflict of interest is created for the sister.
• C. This is not a material change, so it is binding on the parties.
• D. Any change in the contract is a counteroffer, so the offer is rejected.

Answer: D. Under the "mirror image rule," any modification to a written offer acts as a total rejection of the original offer and creates a counteroffer.