NJ Licensing
27%of exam
Agency + Practice
25%of exam
Contracts + Disclosures
26%of exam
Property + Valuation
23%of exam
Finance + Math
17%of exam
Quick Facts
- Exam
- NJ Salesperson
- Questions
- 110 scored
- Pass
- 70% / 77 correct
- Time
- 4 hours
- Vendor
- PSI
- Education
- 75 hours
- Eligibility
- 1 year
- Reciprocity
- None
License Flow
75 -> PSI -> prints -> broker
75: schoolPSI: examprints: backgroundbroker: sponsor
License Path Picker
- First NJ license→75-hour course
- Course complete→PSI eligibility
- Pass exam→Fingerprinting
- Apply license→Employing broker
- Out-of-state license→No reciprocity
- Renew active license→12 CE hours
License Path
- Minimum age
- 18 years
- Education
- High school equivalent
- Prelicense
- 75 approved hours
- Provider
- NJREC licensed school
- Eligibility
- One-year window
- Broker sponsor
- Required for license
- Fingerprinting
- Before licensure
- Character
- Honesty/trustworthiness
NJREC Powers
- NJREC
- License regulator
- Records
- Commission maintenance
- Sanctions
- Discipline tools
- Fines
- Money penalty
- Suspension
- Temporary loss
- Revocation
- License termination
- Schools
- Approval oversight
- No reciprocity
- All states
State Law
- License Act
- N.J.S.A. 45:15
- Rules
- N.J.A.C. 11:5
- Full Disclosure Act
- Out-of-state sales
- LAD
- NJ fair housing
- Guaranty Fund
- Consumer recovery
- Time Share Act
- Timeshare regulation
- Pinelands
- Regional controls
- Wetlands Act
- Freshwater restrictions
Five Relationships
Seller, Buyer, Dual, Designated, Transaction
Seller: sellerBuyer: buyerDual: bothTransaction: neither
CIS vs Agreement
CIS
- Disclosure only
- Not a contract
- Before confidential talk
Agreement
- Creates agency
- States terms
- Compensation/duration
Explain vs create
Agency Picker
- Represent seller→Seller agent
- Represent buyer→Buyer agent
- Represent both→Dual agent
- Separate advocates→Designated agent
- No representation→Transaction broker
- Explain relationships→CIS
Agency Relationships
- Seller agent
- Represents seller
- Buyer agent
- Represents buyer
- Dual agent
- Represents both
- Designated agent
- Separate advocates
- Transaction broker
- No representation
- Subagent
- Seller-side agent
- Written consent
- Dual required
- Brokerage firm
- Dual in designation
Dual vs Designated
Dual
- Firm represents both
- Loyalty limited
- Consent required
Designated
- Separate licensees
- Firm still dual
- Advocacy restored
Firm vs individuals
Agency Duties
- Care
- Competent service
- Loyalty
- Principal first
- Confidentiality
- Protect secrets
- Disclosure
- Material facts
- Accounting
- Track funds
- Honesty
- All parties
- Good faith
- Customer duty
- CIS
- Disclosure only
Agent vs Transaction Broker
Agent
- Represents principal
- Fiduciary duties
- Confidentiality owed
Transaction broker
- Represents neither
- Facilitates closing
- No confidentiality
Represent vs facilitate
Practice Rules
- Advertising
- Brokerage compliance
- Rebates
- Allowed if disclosed
- Inducements
- Disclosure required
- Commissions
- Through broker
- Trust funds
- Escrow handling
- Bookkeeping
- Escrow records
- Listing content
- Required terms
- Place of business
- Office rules
Void vs Voidable
Void
- Never legal
- No enforcement
- Illegal purpose
Voidable
- Valid until canceled
- One party choice
- Minor/duress
Nothing vs cancelable
Contract Picker
- Change existing contract→Amendment
- Add extra term→Addendum
- Buyer condition→Contingency
- Attorney objects→Disapproval notice
- Known defect→Disclosure
- Flood history→Flood disclosure
Contracts
- Offer
- Proposed terms
- Acceptance
- Mirror assent
- Consideration
- Bargained value
- Capacity
- Legal ability
- Legality
- Lawful purpose
- Void
- Never valid
- Voidable
- May cancel
- Bilateral
- Promise for promise
NJ Disclosures
- SPCDS
- Seller condition form
- Flood risk
- Required questions
- Material defect
- Must disclose
- Lead paint
- Pre-1978 homes
- Radon
- Known hazard
- ISRA
- Industrial cleanup
- UST
- Tank issue
- Attorney review
- Three business days
Fair Housing
- LAD
- NJ anti-discrimination
- Source income
- Protected in NJ
- Gender identity
- Protected class
- Family status
- Children protected
- Steering
- Neighborhood directing
- Blockbusting
- Fear selling
- Redlining
- Area denial
- ADA
- Accessibility duties
Value Approaches
Sales, Cost, Income
Sales: compsCost: rebuildIncome: NOI
CMA vs Appraisal
CMA
- Broker estimate
- Marketing/listing
- Not appraisal
Appraisal
- Licensed appraiser
- Value opinion
- Lender use
Broker vs appraiser
Value Picker
- Broker listing price→CMA
- Lender value→Appraisal
- Similar homes→Market approach
- Special-purpose property→Cost approach
- Rental income→Income approach
- Algorithm estimate→AVM
Ownership
- Severalty
- Sole ownership
- TIC
- No survivorship
- Joint tenancy
- Survivorship possible
- Entirety
- Married spouses
- Condo
- Unit plus common
- Co-op
- Shares plus lease
- Timeshare
- Interval ownership
- Life estate
- Lifetime interest
Marketable vs Insurable
Marketable
- Reasonably clear
- Buyer can accept
- Few defects
Insurable
- Insurer accepts
- Policy available
- Risk priced
Legal quality vs coverage
Valuation
- Appraisal
- Value opinion
- CMA
- Broker price analysis
- BPO
- Broker opinion
- AVM
- Automated estimate
- Market approach
- Comparable sales
- Cost approach
- Replacement less depreciation
- Income approach
- Capitalized income
- Highest use
- Max productive use
Title Transfer
- Deed
- Conveyance instrument
- Recordation
- Public notice
- Marketable title
- Reasonably clear
- Insurable title
- Title company accepts
- General warranty
- Broad covenants
- Quitclaim
- No warranties
- Foreclosure
- Lien enforcement
- Probate
- Estate transfer
Math Stack
LTV, PITI, NOI, Cap
LTV: loan/valuePITI: paymentNOI: incomeCap: rate
Proration vs RTF
Proration
- Split expenses
- Time based
- Buyer/seller credit
RTF
- Transfer tax
- Recording sale
- Seller cost
Split vs tax
Math Picker
- Loan percent→LTV
- Income property→Cap rate
- Shared tax bill→Proration
- Seller bottom line→Net proceeds
- Buyer funds→Cash to close
- Recording sale→RTF
Financing
- LTV
- Loan/value
- PITI
- Payment components
- PMI
- Private mortgage insurance
- Points
- Prepaid interest
- FHA
- Insured loan
- VA
- Guaranteed loan
- ARM
- Adjustable rate
- Balloon
- Large final payment
Calculations
- Net proceeds
- Seller receives
- Cash to close
- Buyer needs
- Proration
- Shared period split
- RTF
- Transfer fee
- Equity
- Value minus debt
- Cap rate
- NOI/value
- Discount points
- Percent of loan
- Origination fee
- Lender charge
Common Traps
CIS trap
CIS informs only ≠ Agreement creates agency
Designated agency trap
Agents advocate separately ≠ Firm remains dual
Reciprocity trap
No NJ reciprocity ≠ Waiver is different
Disclosure trap
Known defects disclose ≠ Concealment is risk
Flood trap
Flood risk required ≠ Not just past flooding
Math trap
RTF is tax ≠ Proration is allocation
Fair housing trap
LAD broader than federal ≠ Source income protected
Last Minute
- 1.110 scored; 77 correct passes
- 2.Eligibility expires after one year
- 3.No reciprocity with any state
- 4.CIS is not agency contract
- 5.Dual agency needs written consent
- 6.Designated agents; firm still dual
- 7.Transaction broker represents neither
- 8.Attorney review = three business days
- 9.Known material defects must disclose
- 10.LAD protects source income
- 11.CMA is not appraisal
- 12.RTF = transfer tax
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