Free NJ Real Estate Exam Flashcards

The most complete form of property ownership. The owner holds the land for an unlimited duration with full rights to use, sell, lease, or will it. It is the baseline estate against which lesser estates (life estates, leaseholds) are compared.

Joint tenancy includes the right of survivorship—a deceased owner's share passes automatically to surviving joint tenants. Tenancy in common has no survivorship; each owner's share passes to their heirs and shares can be unequal.

A form of co-ownership available only to married couples and civil union partners in New Jersey. It includes survivorship and protects the property from a creditor of only one spouse; neither spouse can convey their interest alone.

A right to use adjoining land that benefits the dominant estate and burdens the servient estate. It runs with the land and transfers automatically with the property, unlike an easement in gross which benefits a person or entity.

Any claim, lien, charge, or restriction limiting a property's title or use. Examples: mortgages, tax liens, easements, deed restrictions. An encumbrance does not necessarily prevent transfer but affects value and marketability.

The set of legal rights attached to real property ownership: possession, control, exclusion, enjoyment, and disposition. Government powers (police power, eminent domain, taxation, escheat) limit these rights.

A contract creating agency between a seller and a broker. An exclusive right-to-sell listing pays the broker a commission no matter who sells the property; an exclusive agency listing lets the seller sell themselves commission-free.

Obligations an agent owes a client: care, obedience, loyalty, disclosure, accounting, and confidentiality (mnemonic COLD-AC). These duties continue after closing for confidentiality.

A client is the principal who receives full fiduciary representation. A customer is a party the licensee deals with but does not represent—owed only honesty, fairness, and disclosure of known material facts, not loyalty or confidentiality.

Representing both buyer and seller in the same transaction. Legal in New Jersey only with informed written consent of both parties. The dual agent must remain neutral and cannot advocate for either side's price position.

New Jersey's newer fifth agency option (Consumer Protection Enhancement Act) where a broker assigns different salespersons within the firm to represent the buyer and seller separately, reducing the conflicts inherent in firm-wide dual agency.

New Jersey's mandatory agency disclosure form. It must be presented and explained at the first contact where a substantive discussion occurs, before any confidential information is exchanged, so the consumer understands the available business relationships.

A New Jersey license category allowing a licensee to refer prospects to a broker for a fee but not to engage in negotiations, listings, or showings. Referral agents must be affiliated with a broker and cannot perform brokerage activities.

New Jersey grants no licensing reciprocity to any state. An out-of-state licensee must complete the full 75-hour pre-license course and pass both exam portions like any new applicant—prior experience does not waive requirements.

The New Jersey Real Estate Commission, a body within the Division of Consumer Affairs that licenses salespersons and brokers, adopts rules, investigates complaints, and imposes discipline including suspension and revocation.

New Jersey requires 75 hours of NJREC-approved salesperson pre-license education before sitting for the exam, covering license law, contracts, appraisal, financing, and fair housing.

Salespersons must complete 12 hours of approved continuing education every 2-year renewal cycle, including required core topics on ethics, fair housing, and law updates. A license cannot renew until CE is satisfied.

A state fund that compensates members of the public who obtain a court judgment against a licensee for fraud or misrepresentation but cannot collect it. Payment from the fund leads to automatic license suspension until repaid.

A New Jersey salesperson license is inactive until the licensee affiliates with a licensed broker who supervises their activity. All commissions must flow through the employing broker, not directly to the salesperson.

A 3-business-day window after a broker-prepared sales contract is signed during which either party's attorney may disapprove and cancel the contract. If no attorney acts within three business days, the contract becomes binding.

Requires contracts for the sale of real estate to be in writing and signed to be enforceable. An oral agreement to sell land generally cannot be enforced in court even if both parties admit it.

Funds a buyer submits to show good faith. In New Jersey it is held in the broker's trust (escrow) account, not commingled with operating funds, and disbursed only per the contract or written instructions of both parties.

A condition that must be satisfied for a contract to proceed (financing, inspection, appraisal, sale of buyer's home). If the contingency fails within its timeframe, the protected party may cancel and typically recover the deposit.

A contract clause setting a fixed amount (often the deposit) the seller keeps if the buyer defaults, agreed in advance. It substitutes for proving actual damages and limits the seller's recovery to that amount.

A court remedy compelling a defaulting seller to complete the sale rather than pay money damages. Available because each parcel of real estate is considered legally unique and money may not adequately compensate the buyer.

New Jersey sellers of residential property must disclose known material defects affecting value. Failure to disclose a known latent defect can expose the seller and listing agent to liability even after closing.

New Jersey contracts include notice that buyers may obtain registered sex offender information from law enforcement. Licensees are not required to research or volunteer offender locations but cannot misrepresent if asked.

Federal law requires sellers of homes built before 1978 to disclose known lead-based paint hazards, provide an EPA pamphlet, and give buyers a 10-day period to inspect for lead. Applies in New Jersey transactions.

New Jersey requires notice that information about off-site conditions (landfills, contaminated sites, transportation, zoning) may be obtained from the municipal clerk. It directs buyers to public records rather than requiring agent investigation.

A property psychologically impacted by events like a death or crime. New Jersey does not require disclosure of these non-physical conditions, but a licensee may not knowingly make a false statement if directly asked.

A fee the seller pays at recording, calculated on a sliding scale that rises with consideration—from roughly $2 per $500 on lower-priced sales up to about $6.05 per $500 on amounts exceeding $1 million.

A 1% tax on the buyer for transfers of residential or certain commercial property with consideration over $1,000,000. It is separate from and in addition to the seller's Realty Transfer Fee.

Non-resident sellers must have estimated New Jersey Gross Income Tax withheld at closing on the gain from the sale. This ensures the state collects income tax before sale proceeds leave New Jersey.

Tax based on assessed value (Latin: 'according to value'). New Jersey municipalities levy these taxes; an equalization ratio adjusts assessed values toward true market value across taxing districts.

Dividing recurring costs (property taxes, HOA dues, prepaid items) between buyer and seller based on the closing date. The party who owned the property for that portion of the period bears that share of the expense.

Deeds and mortgages are recorded with the County Clerk or Register of Deeds in the county where the property sits. Recording gives constructive notice and establishes priority of claims by date and time.

New Jersey's fair housing statute, broader than federal law. It adds protected classes such as marital/civil union status, sexual orientation, gender identity, ancestry, and lawful source of income, with significant civil penalties.

The federal Fair Housing Act prohibits housing discrimination based on race, color, religion, national origin, sex, familial status, and disability. New Jersey's LAD adds several more protected categories on top of these.

Directing prospects toward or away from neighborhoods based on a protected class. It is illegal even if the agent believes it matches client preferences, because it limits housing choice along protected lines.

Inducing owners to sell by suggesting that members of a protected class moving in will lower values or change the neighborhood. A prohibited practice under both federal law and the NJ LAD.

A lender or insurer refusing or limiting services in certain areas based on the racial or ethnic makeup of residents rather than objective risk. Prohibited under fair housing and fair lending laws.

An accommodation is a change in rules or policies (e.g., allowing a service animal despite a no-pet rule). A modification is a physical change to the unit. Both must be permitted for persons with disabilities under fair housing law.

The promissory note is the borrower's personal promise to repay the debt. The mortgage is the security instrument pledging the property as collateral, allowing foreclosure if the note is not paid.

Loan amount divided by the lesser of price or appraised value, expressed as a percent. A $255,000 loan on a $300,000 property is an 85% LTV. Higher LTV usually means higher risk and possibly mortgage insurance.

An appraisal method estimating value by adjusting recent comparable sales for differences from the subject property. It is the primary approach for residential properties because it reflects actual market behavior.

New Jersey uses judicial foreclosure—a lender must file a court action to foreclose. The NJ Fair Foreclosure Act gives homeowners notice and a right to cure the default before the property is sold.

A conventional loan is not government-insured and often needs higher credit and down payment; private mortgage insurance applies below 20% down. An FHA loan is government-insured, allowing lower down payments with mortgage insurance premiums.

Improperly mixing client trust funds (earnest money) with the broker's personal or business funds. It is a prohibited practice in New Jersey and grounds for discipline even if no client loses money.

A separate, non-interest-bearing (unless agreed) account a broker uses to hold client funds. The broker is responsible for accurate records and may not use these funds for operating expenses.

An arrangement where the broker keeps any sale amount above the seller's fixed net. New Jersey prohibits net listings under N.J.A.C. 11:5-6.2(f).