Free New Jersey Property Practice Test — LicenseIQ

Question 1

A chronological summary of all recorded documents affecting a property's title, such as deeds, mortgages and liens, is a(n):

Accepted Answer

The abstract summarizes the recorded history; the chain of title lists successive owners; an attorney's opinion of title evaluates it.

Question 2

A commercial property has potential gross income of $240,000 and an 8% vacancy allowance. Using a gross income multiplier of 6, what is the estimated value?

Accepted Answer

EGI = $240,000 - 8% = $220,800; value = $220,800 x 6 = $1,324,800.

Question 3

A property is assessed at $280,000 and the tax rate is 22 mills. What is the annual tax?

Accepted Answer

1 mill = $1 per $1,000. $280,000 / 1,000 = 280; 280 x 22 = $6,160.

Question 4

A property manager receives a tenant's security deposit and advance rent. These funds must be deposited in the:

Accepted Answer

Money belonging to others goes into a trust account; depositing it in an operating account is commingling.

Question 5

A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

Accepted Answer

A general agent handles a range of matters in a continuing relationship (typical of property management). A listing agent is a special (limited) agent for one transaction.

Question 6

The most likely reason the NJ Real Estate Commission will deny a license is a conviction for a 'money offense' (such as theft or forgery) within the past:

Accepted Answer

Convictions for theft, forgery, burglary and similar offenses within the past five years must be disclosed and are the most common basis for denial. Older records of dishonesty can still show lack of good character.

Question 7

The NJ fingerprinting process used for real estate license applicants is called:

Accepted Answer

NJ uses Live Scan, a State Police-coordinated electronic fingerprinting process. Applicants are fingerprinted each time they apply for a new type of license.

Question 8

Under NJ advertising rules, a broker may advertise a property as 'sold':

Accepted Answer

A property may not be advertised as sold until closing and title transfer. Between completion of attorney review and closing, it should be described as 'under contract.'

Question 9

The New Jersey Real Estate Commission operates as a division of the:

Accepted Answer

The NJREC is part of the Department of Banking and Insurance, which provides its funds and personnel. Consumer Affairs oversees many other professional boards but not the REC.

Question 10

A NJ broker of record dies and the firm has no broker-salesperson. A salesperson who has been engaged full-time in real estate for at least three years may apply for a temporary broker license within:

Accepted Answer

The qualified salesperson must apply within 30 days of the broker's death or incapacity. The temporary license lasts one year, during which the permanent broker requirements must be completed.

Question 11

Which statement about the composition of the NJ Real Estate Commission is correct?

Accepted Answer

Two of the eight commissioners are public members who cannot hold licenses. The state-agency employee receives no compensation, and the president is elected by majority vote of the commissioners themselves.

Question 12

A non-navigable stream forms the boundary between two NJ properties. Ownership of the streambed generally:

Accepted Answer

For non-navigable waters, adjoining owners own the bed to the centerline. The State owns beds of navigable rivers unless it has sold those riparian rights.

Question 13

Under the NJ Private Well Testing Act, when a property whose primary water source is a private well is sold:

Accepted Answer

The PWTA requires testing of untreated well water (up to 43 parameters) by a certified laboratory, with results reviewed by buyer and seller before closing.

Question 14

A property that fails to sell at the foreclosure auction and becomes owned by the lender is called:

Accepted Answer

When no bid meets the lender's minimum, the lender takes title and the property becomes REO inventory.

Question 15

A title search shows owner A conveyed to B, but the next record shows C as owner with no deed from B. This is an example of:

Accepted Answer

Gaps in the chain or unreleased liens are clouds that must be cleared (e.g., by quitclaim deed or quiet title action) before title is marketable.

Question 16

An investor buys a property for $180,000 and sells for $216,000. What is the percent of profit on cost?

Accepted Answer

Profit = $36,000; $36,000 / $180,000 (cost) = 20%. Dividing by the sale price ($216,000) would give 16.7%.

Question 17

Under the NJ Statute of Frauds as taught in the course, a lease of real estate must be in writing to be enforceable if its term is:

Accepted Answer

Under the NJ Statute of Frauds (N.J.S.A. Title 25), leases of more than three years must be in writing. Note that NJ attorney review applies to licensee-prepared leases of one year or more.

Question 18

A timeshare that lets the owner use the property during a specific, set week each year is a:

Accepted Answer

Fixed-week timeshares assign the same week every year; floating weeks allow different weeks subject to availability.

Question 19

Which NJ body can suspend or revoke a real estate license for violations?

Accepted Answer

The NJ REC can investigate, hold hearings, fine, place on probation, suspend and revoke licenses.

Question 20

Members of the New Jersey Real Estate Commission are appointed by the:

Accepted Answer

Commissioners are appointed by the Governor and serve three-year, part-time terms. The two-year period is the license cycle, not a commissioner's term.

Question 21

In general, a 'stigmatized' property refers to one:

Accepted Answer

Stigmatized properties are affected by events (crime, death) rather than physical condition; disclosure rules vary by state. (Well-established principle; not detailed in the course.)

Question 22

The subject property has a garage; a comparable that sold for $300,000 does not. The garage is worth $15,000. The adjusted value of the comparable is:

Accepted Answer

Adjust the comparable, never the subject. The subject is superior, so add $15,000 to the comp: $315,000.

Question 23

A person who holds a power of attorney from a property owner and sells the owner's NJ home is generally:

Accepted Answer

An attorney-in-fact selling the principal's property generally needs no license, unless the arrangement is used to deliberately evade licensing laws. The power of attorney should be acknowledged and recorded.

Question 24

A tenant refers a friend to her apartment complex. After the friend signs a lease, the property manager gives the tenant a $50 gift card as a thank-you. Under NJ law:

Accepted Answer

Compensation includes any valuable consideration, such as a gift card. Procuring a prospective tenant for compensation is licensed activity. There is no dollar threshold, and leasing is included.

Question 25

In the sale of an ongoing business that includes the lease of its location, a real estate license is required to be compensated for:

Accepted Answer

A license is required for compensation on the real estate component (sale or lease of the property, renewals, assignments). The sale of the business itself is personal property.

New Jersey real estate property practice test

1. A chronological summary of all recorded documents affecting a property's title, such as deeds, mortgages and liens, is a(n):

2. A commercial property has potential gross income of $240,000 and an 8% vacancy allowance. Using a gross income multiplier of 6, what is the estimated value?

3. A property is assessed at $280,000 and the tax rate is 22 mills. What is the annual tax?

4. A property manager receives a tenant's security deposit and advance rent. These funds must be deposited in the:

5. A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

6. The most likely reason the NJ Real Estate Commission will deny a license is a conviction for a 'money offense' (such as theft or forgery) within the past:

7. The NJ fingerprinting process used for real estate license applicants is called:

8. Under NJ advertising rules, a broker may advertise a property as 'sold':

9. The New Jersey Real Estate Commission operates as a division of the:

10. A NJ broker of record dies and the firm has no broker-salesperson. A salesperson who has been engaged full-time in real estate for at least three years may apply for a temporary broker license within:

11. Which statement about the composition of the NJ Real Estate Commission is correct?

12. A non-navigable stream forms the boundary between two NJ properties. Ownership of the streambed generally:

13. Under the NJ Private Well Testing Act, when a property whose primary water source is a private well is sold:

14. A property that fails to sell at the foreclosure auction and becomes owned by the lender is called:

15. A title search shows owner A conveyed to B, but the next record shows C as owner with no deed from B. This is an example of:

16. An investor buys a property for $180,000 and sells for $216,000. What is the percent of profit on cost?

17. Under the NJ Statute of Frauds as taught in the course, a lease of real estate must be in writing to be enforceable if its term is:

18. A timeshare that lets the owner use the property during a specific, set week each year is a:

19. Which NJ body can suspend or revoke a real estate license for violations?

20. Members of the New Jersey Real Estate Commission are appointed by the:

21. In general, a 'stigmatized' property refers to one:

22. The subject property has a garage; a comparable that sold for $300,000 does not. The garage is worth $15,000. The adjusted value of the comparable is:

23. A person who holds a power of attorney from a property owner and sells the owner's NJ home is generally:

24. A tenant refers a friend to her apartment complex. After the friend signs a lease, the property manager gives the tenant a $50 gift card as a thank-you. Under NJ law:

25. In the sale of an ongoing business that includes the lease of its location, a real estate license is required to be compensated for:

Sources