NEW JERSEY REAL ESTATE EXAM 1
QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS 100%
CORRECT RATED A+ ||UPDATED 2025
Q1: In a transaction where a licensee is representing the buyer only, what is
the seller considered in this situation?
A. a customer
B. a client
C. a fiduciary
D. an agent
✔✔ A. a customer
Explanation: Unless stated otherwise, licensees represent only one side of the
transaction. Here, the buyer is the client, and the seller is a customer.
Q2: An optionor and an optionee make a contract for an option on a
commercial property. If the optionee decides to exercise the option, when
must he perform?
A. He must exercise his option within 6 months under state law
B. He must exercise his option under the terms of the option contract
C. He must exercise his option when the optionor demands it
D. He can exercise his option whenever he wants
✔✔ B. He must exercise his option under the terms of the option contract
Explanation: Option agreements are governed by the specific terms of the contract
regarding time and price.
Q3: When can a landlord evict a disabled blind or disabled tenant from the
premises?
A. If the tenant gets a dog and the apartment policy does not allow pets
B. If the tenant insists on a handicapped parking place
C. If the tenant makes modifications to his unit at his expense
D. If the tenant has loud parties and makes too much noise
,✔✔ D. If the tenant has loud parties and makes too much noise
Explanation: Reasonable accommodations must be made for disabilities, but
disruptive behavior like excessive noise is still grounds for eviction.
4. Broker Carr, with ABC Real Estate Company, listed the property with a seller.
Broker Smith, with XYZ Real Estate Company, called Broker Carr, and disclosed
that he was a Buyer Agent. Broker Smith wrote a contract with a buyer for the sale
of the property. What, if any, is the relationship between the buyer's broker, the
seller and the listing broker?
A. There is not a relationship between the parties. Broker Carr represents the Seller
and
Broker Smith represents the Buyer.
B. customer
C. agency
D. dual agency -ANSWER✔✔A. Since each broker represents separate sides in the
transaction, no relationship exists.
5. A buyer bought a property without telling the seller of his intended purpose for
the property. The contract contains no contingency clauses and it is a properly
executed contract. After the closing, the buyer is unable to obtain the zoning he
needs for his commercial project. What is the contract at this stage?
A. void
B. voidable
C. breach
D. enforceable -ANSWER✔✔D. Since there were no contingency clauses, and no
restrictive covenants of record. If the buyer cannot secure a change of zoning , the
contract is perfectly valid as stands and is enforceable between the parties.
,6. The seller and the buyer finally agreed to a purchase price of $203,500 with the
closing to occur on June 15, 2011. The taxes for the year 2011 in the amount of
$2,500 have not been paid by the seller. (Taxes are paid in arrears). How much
would the tax proration amount to, and how would it appear on a full settlement
statement? Base your answer on a 365 day year, and the buyer is responsible for
the day of settlement.
A. $1,130.14 debit the seller and credit the buyer
B. $1,130.14 debit the buyer and credit the seller
C. $2,500 credit the seller and debit the buyer
D. Nothing. The seller does not owe since the buyer is buying -ANSWER✔✔A.
The seller would owe money, and the buyer would receive money, because the
seller has not paid the taxes. $2,500 divided by 365 is $6.849315 times the actual
days of 165 is $1,130.14.
7. A seller listed his home for six months on February 26. On April 29, a buyer
made an offer on the property. The listing broker presented the offer to the seller
on April 30. The seller accepted the offer on May 1, with the closing to occur on
June 15. Assuming the closing took place on June 15, when did the listing expire?
A. 26-May-04
B. 15-Jun-04
C. 26-Aug-04
D. 15-Dec-04 -ANSWER✔✔B. Listing contracts set forth the terms and conditions
under which a broker will sell a property for his or her client. When the closing
takes place, the terms of the contract have been fulfilled and it expires
automatically.
, 8. The sellers listed their property for six months on February 26 for $104,500.
They agreed to pay the listing broker a 7% commission at closing on the agreed
upon sale price. A buyer made an offer on the property on March 29 for $102,000.
The seller countered the offer on April 1 at $103,500, and the buyer accepted the
counter offer with the closing to occur on June 15. How much commission did the
seller owe the listing broker, and how would it appear on the settlement statement?
A. $3,622.50. Debit the seller.
B. $7,140. Credit the seller.
C. $7,315. Debit the seller.
D. $7,245. Debit the seller. -ANSWER✔✔D. Commissions are paid based on the
actual selling price, not the listing price. Additionally, since the broker represented
the sellers in this transaction, the commission is debited from their side of the
ledger.
9. The seller and the buyer agreed to a purchase price of $103,500 with the closing
to occur on June 15. The seller's loan balance after the June 1 payment was
$39,440. with an interest rate of 10%.The monthly payment was $440 principal
and interest. What was the loan balance the day of closing, and how much interest
did the seller owe the bank?
A. loan balance $39,440; interest due $10,350
B. loan balance $39,000; interest due $3,944
C. loan balance $39,000; interest due $862.50
D. loan balance $39,440; interest due $164.33 -ANSWER✔✔D. Although many
types of loans can become more complex in their calculations of remaining
principal and interest at a particular point in time, in this case the interest portion of
the payment is calculated simply by multiplying $39,440 by 10% and dividing by
twelve. That results in monthly interest of $328.66, with half that amount, or
$164.33 added to the principal payment at closing.
QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS 100%
CORRECT RATED A+ ||UPDATED 2025
Q1: In a transaction where a licensee is representing the buyer only, what is
the seller considered in this situation?
A. a customer
B. a client
C. a fiduciary
D. an agent
✔✔ A. a customer
Explanation: Unless stated otherwise, licensees represent only one side of the
transaction. Here, the buyer is the client, and the seller is a customer.
Q2: An optionor and an optionee make a contract for an option on a
commercial property. If the optionee decides to exercise the option, when
must he perform?
A. He must exercise his option within 6 months under state law
B. He must exercise his option under the terms of the option contract
C. He must exercise his option when the optionor demands it
D. He can exercise his option whenever he wants
✔✔ B. He must exercise his option under the terms of the option contract
Explanation: Option agreements are governed by the specific terms of the contract
regarding time and price.
Q3: When can a landlord evict a disabled blind or disabled tenant from the
premises?
A. If the tenant gets a dog and the apartment policy does not allow pets
B. If the tenant insists on a handicapped parking place
C. If the tenant makes modifications to his unit at his expense
D. If the tenant has loud parties and makes too much noise
,✔✔ D. If the tenant has loud parties and makes too much noise
Explanation: Reasonable accommodations must be made for disabilities, but
disruptive behavior like excessive noise is still grounds for eviction.
4. Broker Carr, with ABC Real Estate Company, listed the property with a seller.
Broker Smith, with XYZ Real Estate Company, called Broker Carr, and disclosed
that he was a Buyer Agent. Broker Smith wrote a contract with a buyer for the sale
of the property. What, if any, is the relationship between the buyer's broker, the
seller and the listing broker?
A. There is not a relationship between the parties. Broker Carr represents the Seller
and
Broker Smith represents the Buyer.
B. customer
C. agency
D. dual agency -ANSWER✔✔A. Since each broker represents separate sides in the
transaction, no relationship exists.
5. A buyer bought a property without telling the seller of his intended purpose for
the property. The contract contains no contingency clauses and it is a properly
executed contract. After the closing, the buyer is unable to obtain the zoning he
needs for his commercial project. What is the contract at this stage?
A. void
B. voidable
C. breach
D. enforceable -ANSWER✔✔D. Since there were no contingency clauses, and no
restrictive covenants of record. If the buyer cannot secure a change of zoning , the
contract is perfectly valid as stands and is enforceable between the parties.
,6. The seller and the buyer finally agreed to a purchase price of $203,500 with the
closing to occur on June 15, 2011. The taxes for the year 2011 in the amount of
$2,500 have not been paid by the seller. (Taxes are paid in arrears). How much
would the tax proration amount to, and how would it appear on a full settlement
statement? Base your answer on a 365 day year, and the buyer is responsible for
the day of settlement.
A. $1,130.14 debit the seller and credit the buyer
B. $1,130.14 debit the buyer and credit the seller
C. $2,500 credit the seller and debit the buyer
D. Nothing. The seller does not owe since the buyer is buying -ANSWER✔✔A.
The seller would owe money, and the buyer would receive money, because the
seller has not paid the taxes. $2,500 divided by 365 is $6.849315 times the actual
days of 165 is $1,130.14.
7. A seller listed his home for six months on February 26. On April 29, a buyer
made an offer on the property. The listing broker presented the offer to the seller
on April 30. The seller accepted the offer on May 1, with the closing to occur on
June 15. Assuming the closing took place on June 15, when did the listing expire?
A. 26-May-04
B. 15-Jun-04
C. 26-Aug-04
D. 15-Dec-04 -ANSWER✔✔B. Listing contracts set forth the terms and conditions
under which a broker will sell a property for his or her client. When the closing
takes place, the terms of the contract have been fulfilled and it expires
automatically.
, 8. The sellers listed their property for six months on February 26 for $104,500.
They agreed to pay the listing broker a 7% commission at closing on the agreed
upon sale price. A buyer made an offer on the property on March 29 for $102,000.
The seller countered the offer on April 1 at $103,500, and the buyer accepted the
counter offer with the closing to occur on June 15. How much commission did the
seller owe the listing broker, and how would it appear on the settlement statement?
A. $3,622.50. Debit the seller.
B. $7,140. Credit the seller.
C. $7,315. Debit the seller.
D. $7,245. Debit the seller. -ANSWER✔✔D. Commissions are paid based on the
actual selling price, not the listing price. Additionally, since the broker represented
the sellers in this transaction, the commission is debited from their side of the
ledger.
9. The seller and the buyer agreed to a purchase price of $103,500 with the closing
to occur on June 15. The seller's loan balance after the June 1 payment was
$39,440. with an interest rate of 10%.The monthly payment was $440 principal
and interest. What was the loan balance the day of closing, and how much interest
did the seller owe the bank?
A. loan balance $39,440; interest due $10,350
B. loan balance $39,000; interest due $3,944
C. loan balance $39,000; interest due $862.50
D. loan balance $39,440; interest due $164.33 -ANSWER✔✔D. Although many
types of loans can become more complex in their calculations of remaining
principal and interest at a particular point in time, in this case the interest portion of
the payment is calculated simply by multiplying $39,440 by 10% and dividing by
twelve. That results in monthly interest of $328.66, with half that amount, or
$164.33 added to the principal payment at closing.
