Free New Jersey Agency Practice Test — LicenseIQ

Question 1

An agency relationship can be terminated by all of the following EXCEPT:

Accepted Answer

Agency ends by performance, expiration, mutual agreement, operation of law, death or incapacity, or destruction of the property - not by the wish of an unrepresented customer.

Question 2

An agent advertises a home as having a 'new roof' without verifying it; the roof is actually 18 years old. This is:

Accepted Answer

Stating unverified facts that prove false is negligent misrepresentation; knowingly false statements are fraud. Puffing is opinion, not a verifiable fact.

Question 3

Representing both buyer and seller in the same transaction is dual agency, which in NJ requires:

Accepted Answer

NJ permits disclosed dual agency only with the informed written consent of both parties, on a separate document; undisclosed dual agency is illegal.

Question 4

Which is a valid term for a NJ buyer agency agreement?

Accepted Answer

Buyer agreements, like listings, must have an end date and negotiated compensation; commissions are never set by law.

Question 5

Which statement about dual agency is correct?

Accepted Answer

Dual agency creates an inherent conflict; with informed written consent, the agent provides limited representation and must keep each party's confidences.

Question 6

A key purpose of the New Jersey Housing and Mortgage Finance Agency (NJHMFA) is to:

Accepted Answer

NJHMFA funds affordable mortgages and down payment assistance, finances affordable rental housing, and offers foreclosure prevention help.

Question 7

A seller knows that the basement flooded last spring, but the damage was repaired and is not visible. The seller and listing agent must:

Accepted Answer

Latent (hidden) defects known to the seller or agent must be disclosed; failing to do so can create liability for both.

Question 8

How many business relationships are recognized in the NJ Consumer Information Statement, and how many are agency relationships?

Accepted Answer

NJ recognizes seller's agent, buyer's agent, disclosed dual agent, designated agent and transaction broker. The transaction broker is a non-agency relationship.

Question 9

The best way to create an agency relationship is a(n):

Accepted Answer

A written express agreement clearly defines parties, duties and compensation and is enforceable.

Question 10

A listing agent knows the seller will accept $20,000 less than list price. A buyer asks, 'Will they take less?' The agent should:

Accepted Answer

The duty of confidentiality bars disclosing information, like the seller's lowest acceptable price, that would harm the client's bargaining position.

Question 11

An agent authorized to perform a single specific act for a principal is a:

Accepted Answer

A special (limited) agent has authority for a specific task, typical of a listing agent. A property manager is usually a general agent.

Question 12

During a listing walk-through, the agent notices fresh paint on one ceiling area and a musty odor. The agent should:

Accepted Answer

Agents are not inspectors, but must recognize red flags (stains, odors, cracks) and disclose them for further investigation.

Question 13

A buyer's agent's brother owns a home that fits the buyer's needs. Before showing it, the agent must:

Accepted Answer

Any personal or financial interest of the agent or family must be disclosed up front so the client can make an informed decision.

Question 14

When a broker appoints one salesperson to represent the seller and another salesperson in the same office to represent the buyer, this is:

Accepted Answer

Designated agency assigns separate agents within one brokerage; the broker is still a dual agent and written consent is required.

Question 15

A NJ buyer asks his agent whether any registered sex offenders live near a home. The agent should:

Accepted Answer

NJ licensees may not obtain or disclose sex-offender information; the Megan's Law statement in every contract directs buyers to the county prosecutor.

Question 16

The fiduciary duty that requires an agent to safeguard and account for all money and property received on behalf of the client is:

Accepted Answer

The duty of accounting requires the agent to track, report on and properly handle all funds and documents belonging to the client.

Question 17

Which fiduciary duty continues even after the agency relationship has ended?

Accepted Answer

Most fiduciary duties end with the agency, but the agent must continue to keep the former client's confidential information private.

Question 18

A material defect that a seller/agent must disclose is one that:

Accepted Answer

Material defects significantly affect value or would influence a buyer's decision and must be disclosed.

Question 19

Under an exclusive buyer agency agreement, the broker is owed compensation:

Accepted Answer

In an exclusive buyer agreement the agency is compensated however the property is acquired during the term; under a non-exclusive agreement, only if the agency directly assists.

Question 20

The client a broker represents is the:

Accepted Answer

The principal is the client to whom the agent owes fiduciary duties; a customer is a party the agent works with but does not represent.

Question 21

Which duty does a seller's agent owe to a buyer who is a customer, not a client?

Accepted Answer

Customers are owed HARD duties - Honesty, Accounting, Reasonable skill and care, and Disclosure of material facts - but not loyalty, obedience or confidentiality.

Question 22

A NJ buyer and seller sign a broker-prepared contract and tell the agent they do not want attorneys and wish to waive attorney review. The agent should explain that:

Accepted Answer

The clause is mandatory in licensee-prepared contracts and cannot be waived or removed. Without disapproval, the contract becomes binding at the end of the three business days.

Question 23

A NJ seller tells his listing agent about mice in the basement but asks the agent not to mention it. The agent must:

Accepted Answer

Omission of known material facts by a licensee is an unlawful practice under the Consumer Fraud Act (N.J.S.A. 56:8-2). Confidentiality never extends to concealing material defects.

Question 24

A seller instructs her listing agent not to show the home to buyers of a certain national origin. The agent should:

Accepted Answer

Obedience requires following lawful instructions only. Discriminatory instructions violate fair housing laws and must be refused.

Question 25

Which of the following is a fiduciary duty an agent owes the principal?

Accepted Answer

Fiduciary duties are Confidentiality, Obedience, Accounting, Loyalty and Disclosure (COALD), plus reasonable care.

New Jersey real estate agency practice test

1. An agency relationship can be terminated by all of the following EXCEPT:

2. An agent advertises a home as having a 'new roof' without verifying it; the roof is actually 18 years old. This is:

3. Representing both buyer and seller in the same transaction is dual agency, which in NJ requires:

4. Which is a valid term for a NJ buyer agency agreement?

5. Which statement about dual agency is correct?

6. A key purpose of the New Jersey Housing and Mortgage Finance Agency (NJHMFA) is to:

7. A seller knows that the basement flooded last spring, but the damage was repaired and is not visible. The seller and listing agent must:

8. How many business relationships are recognized in the NJ Consumer Information Statement, and how many are agency relationships?

9. The best way to create an agency relationship is a(n):

10. A listing agent knows the seller will accept $20,000 less than list price. A buyer asks, 'Will they take less?' The agent should:

11. An agent authorized to perform a single specific act for a principal is a:

12. During a listing walk-through, the agent notices fresh paint on one ceiling area and a musty odor. The agent should:

13. A buyer's agent's brother owns a home that fits the buyer's needs. Before showing it, the agent must:

14. When a broker appoints one salesperson to represent the seller and another salesperson in the same office to represent the buyer, this is:

15. A NJ buyer asks his agent whether any registered sex offenders live near a home. The agent should:

16. The fiduciary duty that requires an agent to safeguard and account for all money and property received on behalf of the client is:

17. Which fiduciary duty continues even after the agency relationship has ended?

18. A material defect that a seller/agent must disclose is one that:

19. Under an exclusive buyer agency agreement, the broker is owed compensation:

20. The client a broker represents is the:

21. Which duty does a seller's agent owe to a buyer who is a customer, not a client?

22. A NJ buyer and seller sign a broker-prepared contract and tell the agent they do not want attorneys and wish to waive attorney review. The agent should explain that:

23. A NJ seller tells his listing agent about mice in the basement but asks the agent not to mention it. The agent must:

24. A seller instructs her listing agent not to show the home to buyers of a certain national origin. The agent should:

25. Which of the following is a fiduciary duty an agent owes the principal?

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