NJ Real Estate Exam 2025 Flashcards

NJ Real Estate Exam 2025 Flashcards Tom is constructing a new house valued at $100,000.Given that the average property value of his surrounding neighbors is $225,000, which principle suggests that Tom will experience a positive effect on his property value?A.Principle of RegressionB. Principle of ProgressionC.Principle of SubstitutionD. Principle of contribution BThe Principle of Progression states that a property's value tends to increase when surrounded by higher-valued properties. Tom's property value may benefit from the higher average property values of this neighbors.Which of the following statements is true regarding registration with the Department of Banking and Insurance Regulations?A. Registration is optional for real estate professionalsB. Registration is required for real estate professionalsC. Registration is required for buyers but not sellersD. Registration is required for sellers but not buyers B What does the covenant of seizin entail?A. Guarantee of clear titleB. Right to possess the propertyC. Obligation to pay property taxesD. Maintenance of the property's physical condition

AThe Covenant of Seizin entails: A guarantee that the

grantor owns the property and has the legal right to convey it. This essentially means the title is free from any defects or claims and the grantor has full ownership - so they're not selling something they don't rightfully own.So while "right to possess the property" (B) is partially true, "guarantee of clear title" (A) is the more complete and accurate answer for exam purposes.Toya, a sales associate, plans to sell her house to capitalize on her real estate expertise. What accurately describes Toya's situation?A. Toya can expect to sell her house quickly due to her industry knowledgeB. Toya's real estate expertise will not have an impact on the sale of her houseC. Toya's professional background may enable her to maximize the profit from selling her houseD. Toya's real estate expertise will make it difficult for her to find a buyer for her house C - Toya's knowledge and experience in real estate can provide her with an advantage in effectively marketing and negotiating the sale of her own property How do you determine the property taxes for a property?A.Multiply the assessed value by the tax rateB. Subtract the tax exemptions from the assessed valueC. Divide the market value by the millage rateD. Add the appraised value and assessed value A In which type of financing can negative amortization occur?A. Fixed-rate mortgageB. Adjustable-rate mortgageC. Conventional mortgageD. FHA loan B - negative amortization can occur in an adjustable-rate mortgage when the monthly payment is insufficient to cover the interest, resulting in the unpaid interest being added to the loan balance Once all terms of a contract have been fulfilled and the transaction has closed the contract status is said to be

fully:A. RescindedB. ExecutedC. InsuredD. Amended

B - once all terms of a contract have been fulfilled and the transaction closed the contract is fully executed

Karen recently sold a home for 6% commission. If her commission was $20,700, how much did the property sell for?

$345,000

Kevin is leasing a storefront to open a Pizza Parlor. Any items he attaches to the property which he will use to

conduct his business would be:A. Property of the Property

OwnerB. Trade FixturesC. ChattelD. Real Property

BExplanation:Trade fixtures are items that a tenant installs

to use in the course of business, such as: Ovens in a pizza

parlor Shelving in a retail store Display cases in a bakeryEven though they are attached to the property, trade fixtures are considered personal property of the tenant, not

real property.Why the other options are incorrect: A.

Property of the Property Owner - Not necessarily. Trade fixtures remain the tenant's property and can usually be removed before lease-end. C. Chattel - This refers to personal property in general, but trade fixtures is the more specific and accurate term for this situation. D. Real Property - Fixtures normally become real property, but trade fixtures are the exception - they remain personal property.A buyer wishes to give a post-dated check with an offer.

The broker should:A. Accept the post-dated checkc. Inform

the buyer that post-dated checks are not acceptedb. Advise the buyer to provide a certified check insteadd. Consult with the seller before deciding C - Post-dated checks may create uncertainty and complications in the transaction. It is advisable for the broker to recommend a certified check, which provides immediate funds and security.If the market value of real estate is $72,000 and the property is assessed at 67% of value, what would be the monthly taxes if the tax rate for the area is $6.50 per $100 of assessed value?A. $261.3B. $312.00C. $389.76D.

$420.48

A$72,000 x 67% =$48,240 x $6.5 / $100 => $3135.6 / 12

=$261.30

What is the term for the right of a water company to lay and maintain water mains along the rear of a lot?A. Water easementB. Water servitudeC. Water lienD. Water encroachment A All of the following are involved in the secondary mortgage market EXCEPT for which one?A. Mortgage lendersB.Mortgage brokersC. Government-sponsored enterprisesD.Homebuyers D - The secondary mortgage market involves various entities like mortgage lenders, mortgage brokers, and government-sponsored enterprises (such as Fannie Mae and Freddie Mac), but homebuyers are not directly involved in this market.Mike and Ike orally agree to a two-year lease. If Ike breaches the agreement, can Mike bring a court action to enforce the lease? Explain why or why not.A. Yes, b/c an oral lease is legally bindingB. Yes, because Ike's breach violates the lease agreementC. No, because oral leases are unenforceableD. No, because written documentation is required for a valid lease CIn most jurisdictions, oral lease exceeding a certain duration (e.g. one year) are unenforceable. Leases generally require written documentation to be legally binding.The provision that states all prospective buyers are to be given the same opportunity to select available houses in

their price range without restrictions because of race, color, religion, or national origin is found in which law?A. The Federal Anti-Discrimination ActB. The State Fair Housing ActC. The Uniform Commercial CodeD. The Federal Fair Housing Law D

Mr. B grants his neighbor, Mr. W, a written servitude to cross his property, which is properly recorded. Later, Mr. B sells the property to Mr. G without disclosing the existence of the servitude. What happens to this servitude?A. The servitude remains valid and continues to be enforceable against Mr. GB. The servitude is automatically terminated upon the sale of the propertyC. Mr. W must request a new servitude from Mr. GD. The servitude becomes void and unenforceable against Mr. G AExplanation:Since the servitude (easement) was: Granted in writing Properly recorded in public records...it becomes a matter of public record, and thus "runs with the land" - meaning it remains attached to the property even after it's sold.Mr. G is legally bound by the recorded servitude, even if Mr. B didn't disclose it, because recorded documents provide constructive notice (meaning Mr. G is expected to know what's in the public record).A listing agreement in writing creates which form of agency?A. Negligent AgencyB. Implied AgencyC. Express AgencyD. Ostensible Agency C - A written listing agreement creates an expressed agency. The agency relationship is expressed in writing What does the term "escheat" mean in the context of real estate?A. The transfer of property ownership through inheritanceB. The process of a property being taken over by a government entityC. The negotiation and execution of a real estate contractD. The appraisal of a property's market value B - Escheat refers to the transfer of property ownership to a government entity when an individual dies without leaving a will or legal heirs

The Civil Rights Act of 1866 prohibits:A. Racial

discrimination in the sale of residential propertyB. Racial discrimination in the lease of residential propertyC. Racial discrimination in the sale or lease of residential or commercial propertyD. Racial discrimination in the lease or sale of commercial property

CExplanation:The Civil Rights Act of 1866 is a federal law

that prohibits all racial discrimination in any property

transaction, whether it's: Residential or commercial Sale or

lease With or without a real estate agentIt is very broad and applies regardless of other laws or exemptions (such as

those found in the Fair Housing Act).Key point: The 1866

law focuses only on race - not religion, sex, disability, etc.It's one of the strongest anti-discrimination laws because no exceptions are allowed.Bob Jones, who lacks a real estate license, hires Sally Salesperson to sell his property. During Sally's absence, Bob shows the property, provides price quotations, and accepts deposits. What are the implications of Bob's actions?A. Bob's actions are legal as long as Sally consentsB. Bob's actions are illegal and can lead to legal consequencesC. Bob's actions are permissible if he is a property ownerD. Bob's actions are acceptable as long as he doesn't sign any contracts BConducting real estate activities without a license is prohibited in most jurisdictions. Bob's actions such as showing the property, quoting prices, and accepting deposits, violate licensing requirements and can result in legal consequences If a buyer defaults on a sales contract after providing $10,000 as earnest money for a $200,000 property, what can the seller do with the $10,000?A. Return the entire amount to the buyerB. Keep the entire amount as compensationC. Deduct any incurred expenses and return the remaining amountD. Distribute the money among the real estate agents involved BEarnest money serves as a form of security deposit and is typically forfeited by the buyer in the event of default as a way to compensate the seller for any losses or damages Agent Brook is preparing for a listing appointment and has gathered information to prepare a report of recent market