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New Jersey Real Estate License Exam

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Question 1 of 5.

The purchase and sales agreement provides for release of earnest money to the seller after the buyer's property inspection. The seller requests the earnest money prior to the property inspection. The broker should

A. release the earnest money to the seller immediately.

B. notify the buyer of the broker's intention to release the earnest money to the seller.

C. release the earnest money on the buyer's verbal approval.

D. refuse to release the earnest money.

Explanation: refuse to release the earnest money. Earnest money deposits are placed in escrow to demonstrate the buyer's good faith and are protected under state and commission regulations. These funds are not the broker's property and cannot be disbursed in a way that contradicts the terms of the contract. If the purchase and sales agreement specifies that the release happens after the inspection, then that condition must be honored. If the broker were to release the money early, it would not only breach the contract but also expose the broker to disciplinary action, potential lawsuits, and loss of license. A buyer's verbal approval is not legally binding, and notifying the buyer of intent to release funds does not remove liability. The safest, legally compliant, and ethical action is to refuse the release until the agreed-upon condition is satisfied.

Question 2 of 5.

Salesperson P leaves the employ of Broker A. One of the listings at Broker A's firm has agreed to list with Salesperson P at the new firm. In this instance the listing file

A. can be taken to the new firm so there is no interruption of service to the client.

B. cannot be taken because it belongs to Broker A.

C. should be turned into the MLS.

D. should be given to the seller.

Explanation: the listing file cannot be taken because it belongs to Broker A. Under agency law and commission rules, a listing agreement is a contract between the client and the broker, not with the individual salesperson. When a salesperson moves to a new firm, the client may choose to terminate the existing listing and sign a new agreement with the new broker, but the salesperson cannot simply transfer the file. Doing so would violate fiduciary responsibilities, breach contractual rights of the broker, and could lead to penalties for misappropriation of client documents. While it may seem practical to take the file to avoid service interruption, the law protects the broker's ownership of that listing contract. The only lawful way for the client to move their listing is to formally terminate and re-list with the new brokerage.

Question 3 of 5.

When MUST a listing broker provide a copy of a fully executed written listing agreement to the owner?

A. Upon execution of the listing agreement by all parties

B. Within three days of execution of the listing agreement by registered mail, return-receipt-requested

C. Within five business days of execution of the listing agreement

D. At the time of presentation of a written offer

Explanation: the broker must provide the copy upon execution of the listing agreement by all parties. Real estate law emphasizes transparency and disclosure in contractual relationships. When an owner signs a listing agreement, they should immediately have a fully executed copy for their records. This protects the owner's rights, ensures they understand their obligations, and prevents disputes over contract terms. Waiting several days or tying the delivery to an offer presentation would undermine consumer protection. A listing agreement is the foundation of the brokerage relationship and should be delivered as soon as it becomes binding. Failing to provide it promptly can be seen as negligent, deceptive, or even unlawful depending on jurisdiction, leading to disciplinary action against the broker. Immediate delivery fosters trust, reduces liability, and aligns with industry best practices.

Question 4 of 5.

In advertisements of individual salespersons, which of the following is permitted?

A. Having the broker's name appear in smaller print than the salesperson's name in a newspaper ad.

B. Including reference to a home office.

C. Placing the real estate office sign on a personal residence.

D. Linking a personal real estate webpage to the salesperson's broker's website.

Explanation: linking a personal real estate webpage to the salesperson's broker's website. Advertising rules are strict in real estate because they aim to protect the public from misleading promotions and to maintain broker accountability. Any advertisement must make it clear which broker is responsible for the transaction. Allowing the broker's name to be smaller or hidden elevates the risk of misrepresentation. Similarly, referencing a home office or posting a sign on a personal residence may create consumer confusion and regulatory issues. By contrast, linking a personal page to the broker's website is acceptable because it maintains the broker's visibility, ensures regulatory compliance, and allows consumers to verify licensure and responsibility. This approach balances personal branding for the salesperson while preserving the broker's legal oversight obligations.

Question 5 of 5.

A buyer wants to place a $5,000 cash deposit on a property. The licensee to whom the payment is made MUST provide the buyer with a:

A. list of options as to how the deposit may be paid

B. specific bank office and the account number where the money will be deposited

C. 1099 form confirming the transaction

D. written receipt signed by the licensee

Explanation: the licensee must provide a written receipt signed by the licensee. Real estate practice requires accountability for all client funds, and cash deposits carry special risk because they are easily mishandled. A receipt provides proof of the transaction, establishes a paper trail, and demonstrates compliance with escrow and trust account rules. Providing a bank office or account number is inappropriate and would breach security and confidentiality standards. Issuing a 1099 form is irrelevant, as that is related to tax reporting, not earnest money handling. A written receipt signed by the licensee protects both the buyer and the licensee by documenting the amount, date, and nature of the deposit. It is a safeguard against disputes, ensures compliance with commission regulations, and maintains transparency in fiduciary duty. Without such documentation, the licensee could face severe disciplinary action.

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