New Jersey Real Estate Broker Exam Study Guide
The New Jersey Real Estate Broker Exam involves 115 multiple-choice questions that address all aspects of real estate on the national and state-specific level, including questions specifically targeted to broker candidates. Registering and taking the exam follows the completion of any education and experience requirements set by the state and serves as the final requirement to earn a broker's license. The questions are divided into a national portion and a state portion, with each portion treated as a separate subtest on the exam with a total of four hours to complete the questions on both portions. Despite questions asking candidates to perform real estate calculations, they are not permitted to bring any type of personal calculator to the exam.
New Jersey Real Estate Broker Exam Study Guide - National Portion
|Topics||% of Questions|
|Property Ownership||10% (≈ 8 questions)|
|Land Use Controls and Regulations||5% (≈ 4 questions)|
|Valuation and Market Analysis||7% (≈ 5 questions)|
|Financing||8% (≈ 6 questions)|
|General Principles of Agency||11% (≈ 8 questions)|
|Property Disclosures||7% (≈ 5 questions)|
|Contracts||18% (≈ 13 questions)|
|Leasing and Property Management||5% (≈ 4 questions)|
|Transfer of Title||7% (≈ 5 questions)|
|Practice of Real Estate||14% (≈ 11 questions)|
|Real Estate Calculations||8% (≈ 6 questions)|
The national portion of the exam consists of 75 multiple-choice questions divided into 11 topic categories. These explore the basics of real estate, such as property ownership, agency, and the practice of real estate, as well as more specific information, such as real estate financing, property management, and contract law.
The Property Ownership section of the exam explores various types of ownership, the legal description and physical ways of describing property, as well as encumbrances limiting or affecting property ownership. Topics addressed by questions in this section ask candidates to define property, such as the difference between real and personal property, land characteristics, and the legal descriptions that address usage and mineral rights. Types of ownership can include ownership by a single individual, shared ownership by multiple limited partners, and even ownership that is held as part of a trust rather than in the possession of an individual or individuals.
Land Use Controls and Regulations
The Land Use Controls and Regulations section of the exam discusses the wide variety of ways that a property owner can face limitations on how they can use their property. This includes the seizure of property by a government body for the public good, zoning regulations, and even something as simple as the government issuing property taxes, which allows the government to use the property of others to generate revenue. While most zoning and building code regulations come from local government sources, federal regulations can also limit land use by designating certain areas as protected ecosystems or imposing hazard abatement orders on contaminated sites before development is possible.
Valuation and Market Analysis
The Valuation and Market Analysis section of the exam tests candidates on how real estate professionals determine both the estimated value of a property and the listing price of that same property. This includes a look at the difference between a property's value and its market price, the factors that affect the market price or can change a property's value, and the use of a professional appraiser rather than a value estimate. Additionally, questions may ask broker candidates about a broker's price opinion versus common methods of value estimation and the minutia of a professional real estate appraisal and when such an appraisal is required.
The Financing section of the exam's national portion addresses real estate financing and how buyers typically acquire the funds for a real estate transaction. Candidates must differentiate between the wide variety of loan types based on their defining characteristics, the loan approval process in a real estate transaction, and regulations used to protect consumers from unfair or predatory lending. In addition to identifying specific loan categories, candidates also need to identify special lending programs from various government agencies, including the Federal Housing Agency. Finally, questions in this section may also explore issues of loan underwriting used in approving or denying loan applications.
General Principles of Agency
The General Principles of Agency section of the exam discusses the agency relationship between a real estate professional and a principal in a transaction, as well as the relationships between agents and other real estate professionals. Candidates may need to answer questions regarding the contracts used to create an agency relationship, which can vary based on the type of agent and the role of the principal involved, what conditions permit the termination of the agency contract, and the responsibilities of a real estate professional while engaged in an agency relationship. Finally, some questions discuss the relationship between a real estate professional serving as an agent and the brokerage to which they belong, as well as when to disclose agency or brokerage relationships.
The Property Disclosures section examines the variety of adverse property conditions that must be disclosed by law and those that are not required for disclosure but are considered common industry standard disclosures due to ethical real estate practices. Common conditions that require disclosure or should be disclosed include changes to a property's condition, such as proposed changes in zoning or use controls as well as contested boundaries that require surveys. Other disclosures focus on issues of structures and human safety, such as the presence of lead paint, lead pipes, radon gas, asbestos, and toxic mold. Finally, buyers should be made aware of environmental issues affecting a property, including conditions that require abatement by the buyer or development restrictions due to protected ecosystems, such as wetlands.
Due to how common contracts are in all aspects of real estate, including contracts of employment between brokerages and real estate professionals, between real estate professionals and principals they represent as an agent, between buyers and sellers during a transaction, and between buyers and lenders, the Contracts section of the exam is one of the longest. Contract law topics that candidates should know include the basic elements of a contract, elements required for validity and enforceability, contract breach issues and remedies, the use of electronic signatures, and regulations for the submission, delivery, and acceptance of contracts. Other questions focus on purchasing offers and counteroffers, such as their required elements and time limits on acceptance or rejection.
Leasing and Property Management
The Leasing and Property Management section addresses a part of real estate practice that not all real estate professionals will engage in during their careers, the rental side of real estate and operating as a property manager for a property owner. Regardless of whether test-takers plan to work in property management, they must be able to demonstrate a proficient understanding of tenants' rights, landlords' rights, Fair Housing regulations, and compliance with the Americans with Disabilities Act (ADA). Additionally, candidates should be able to identify the financial and legal responsibilities a property manager has to a property owner and how to determine rental prices for the properties that are managed.
Transfer of Title
The Transfer of Title section of the exam explores the intricacies and common issues involved in transferring property ownership from one entity to another and the legal recording and documentation of that transfer. Questions addressed by this section explore the intricacies of title insurance, such as what it covers and why it is important, common problems that arise during a title search, and how to remedy these problems. Remedies may include suit to quiet a title and handling cloud on title issues. Other questions in this section discuss different types of deeds, the closing process of a transaction to transfer a title, and the use of a home or construction warranty for a home or other structure.
Practice of Real Estate
The Practice of Real Estate Section of the exam explores most of the real estate processes or actions that are not directly involved in a specific transaction, such as managing a real estate office, generating business, and supervising employees or independent contractors. Candidates must identify the required and prohibited elements of real estate advertising, creating and managing client funds through trust accounts, Fair Housing regulations and how that relates to rentals and property sales, the purpose of antitrust laws and how to comply with them, and the responsibilities of licensed real estate professionals. For broker candidates, questions also explore their responsibility to supervise other real estate professionals.
Real Estate Calculations
The Real Estate Calculations section of the exam explores the mathematical calculations common to working as a real estate professional to ensure that candidates who become licensed professionals are adequately prepared to do the job. This includes financial and physical calculations. Common questions require candidates to determine agent commissions, split commissions, calculate a seller's proceeds, and determine required closing costs for a transaction. Additional questions also explore home equity and discount points. Broker candidates are also required to calculate the rate of return on various investments and the broker opinion pricing for the valuation of a property.
New Jersey Real Estate Broker Exam Study Guide - State Portion
|Topics||% of Questions|
|Duties and Powers of the Real Estate Commission||7.5% (≈ 3 questions)|
|Licensing Requirements||10% (≈ 4 questions)|
|Statutes and Rules Governing Licensee Activities||75% (≈ 30 questions)|
|Additional Requirements||7.5% (≈ 3 questions)|
The second portion of the New Jersey Real Estate Broker Exam is the state-specific portion of the test. This consists of 40 multiple-choice questions divided unevenly between four topic categories. These topics involve the state's real estate commission, rules for the activities of licensed real estate professionals, licensing requirements, and a miscellaneous category called 'additional requirements.' All of these and the foci of their questions are addressed by the New Jersey Real Estate Broker Exam Study Guide.
Duties and Powers of the Real Estate Commission
The first section of the state-specific portion of the exam is the Duties and Powers of the Real Estate Commission. This includes only three questions for broker candidates, but these questions can address various topics related to the state's real estate commission. The most common topics are the sanctions the real estate commission can impose on those who violate real estate regulations, and the commission's maintenance of real estate records. The sanctions the commission can impose include monetary fines, license suspension, and license revocation.
The Licensing Requirements section of the exam is also a short section, but it contains four questions instead of just the three questions found in the previous section. These questions explore the different types of real estate licenses granted by the state of New Jersey and the different activities in real estate that require the person performing them to hold a valid and active real estate license. This is differentiated from real estate activities that can be performed by an unlicensed assistant.
Statutes and Rules Governing Licensee Activities
The largest section of the exam is the state portion's Statutes and Rules Governing Licensee Activities. This section contains 30 questions for broker candidates. Topics covered by these questions include the disclosure of agency status or a conflict of interest for an agent or broker, regulations for real estate commissions, guidelines for inducements to avoid unethical inducements, broker-salesperson relationships, regulations for real estate advertising, and place of business requirements. Finally, questions can also explore other regulations, including those involved in real estate transfer taxes, realty transfer fees, zoning codes, and building codes. Specific laws include the Farmland Reassessment Act, the Freshwater Wetlands Protection Act of 1987, the Truth in Renting Act, the Municipal Land Use Law, and the Pinelands Protection Act of 1979.
The final section in the state-specific portion of the exam for a broker is the Additional Requirements section. Instructor candidates have additional sections that other candidates are not required to answer. In the Additional Requirements section, questions address the Real Estate Guaranty Fund and issues surrounding how it is supported, who oversees the fund, and how it is used. Other questions explore issues related to the New Jersey Real Estate Sales Full Disclosure Act, the New Jersey Real Estate Time Share Act, and the New Jersey Law Against Discrimination.
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