Your FREE New Jersey Real Estate Flashcards 2026 – 200+ Cards

The state body that licenses and regulates real estate brokers and salespersons, administering N.J.S.A. 45:15. It is housed within the Department of Banking and Insurance (DOBI).

Within the Department of Banking and Insurance (DOBI) — not the Division of Consumer Affairs and not the Department of State.

The New Jersey Real Estate License Act — the statute governing the licensing and regulation of brokers and salespersons.

The Commission's administrative rules implementing N.J.S.A. 45:15 — agency/CIS, trust accounts, advertising, records, CE, and conduct.

75 hours at a Commission-licensed real estate school before sitting for the licensing exam.

The exam must be passed and a complete license application submitted within one year of finishing the 75-hour course.

At least 18 years old with the equivalent of a high school education.

No. A salesperson license is issued only through a sponsoring broker, who must certify the application; a salesperson cannot operate independently.

Generally three years of full-time experience as a licensed New Jersey salesperson immediately preceding the broker application.

PSI administers the New Jersey real estate salesperson licensing examination.

Generally 70% to pass; confirm the current passing score and question count in the PSI candidate bulletin.

12 CE credits each two-year license term for actively licensed salespersons, broker-salespersons, and brokers.

At least 6 of the 12 CE credits must be in core topics, including 2 credits in ethics, 1 in agency, and 1 in fair housing and the NJ LAD.

The two-year (biennial) license term begins July 1 of odd-numbered years and ends June 30 two years later.

The NJREC-approved disclosure explaining the possible business relationships; presented at first contact under N.J.A.C. 11:5-6.9.

At first contact, before discussing motivation, finances, or price, and before any confidential information is disclosed.

Five: seller's agent, buyer's agent, disclosed dual agent, designated agent, and transaction broker.

Represents and owes full fiduciary duties to the seller.

Represents and owes full fiduciary duties to the buyer.

Represents both buyer and seller — allowed only with the informed written consent of both parties.

The broker of record appoints separate licensees within one firm to represent the buyer and the seller individually, each owing full loyalty.

Works with a buyer and/or seller without representing either party; honest and competent to all, but not a fiduciary.

The firm must obtain the informed, written consent of both the buyer and the seller — the CIS alone is not enough.

Brokers must keep business and transaction records, including acknowledged CIS forms, for six years (N.J.A.C. 11:5-5.4).

Three business days, excluding Saturdays, Sundays, and legal holidays, for either party's attorney to review a licensee-prepared contract.

Only after a fully signed copy of the contract is delivered to both the buyer and the seller; counting begins the next business day.

For any reason — the attorney may disapprove, propose changes, or let the contract become binding by not objecting.

By a method with proof of delivery: fax, e-mail, personal delivery, or overnight mail, to the broker and the other party.

Licensee-prepared contracts for one-to-four-family residential dwellings and vacant one-family lots.

Promptly deposit funds of others into a special trust/escrow account at an authorized NJ financial institution, separate from the broker's own funds.

Not more than five business days following the broker's receipt of the money (N.J.A.C. 11:5-5.1).

Improperly mixing a client's escrow funds with the broker's own money — prohibited under N.J.A.C. 11:5-5.1.

The broker keeps the funds in trust and does not disburse them until the parties agree in writing or a court orders disbursement.

Identify the payor, date and amount of each deposit, the persons for whom funds are held, and the dates, amounts, and payees of disbursements.

Reimburses people who hold an unsatisfied final judgment against a licensee for embezzlement, conversion, or unlawfully obtaining money in a brokerage transaction.

$20,000 per transaction for causes of action accruing after the 1993 amendment (the prior limit was $10,000).

Obtain a final court judgment against the licensee, exhaust remedies, and show inability to collect from the licensee.

Prohibited under N.J.S.A. 45:15-16 — a licensee may not pay brokerage compensation to anyone not licensed; it is grounds for discipline.

Substantial misrepresentation, fraud, dishonest dealing, conversion, and commingling of trust funds (N.J.S.A. 45:15-17).

For newly built homes — at contract signing, the seller gives notice that lists of off-site conditions are kept at the municipal clerk's office (N.J.S.A. 46:3C).

Within the municipality and within one-half mile of any adjoining municipality.

Advises that licensees cannot obtain sex-offender registry data; the buyer may consult the NJ State Police online registry.

When property on a private potable well is sold, the untreated water must be tested and the results provided to and reviewed by the buyer before closing.

A right-to-know disclosure law — it requires testing and disclosure but does not by itself require the seller to remediate exceedances.

The grantor (seller) pays it to the county recording officer when the deed is recorded (N.J.S.A. 46:15-7).

The consideration (sale price) recited in the deed, at graduated rates per $500, with an additional fee on consideration over $150,000.

Adds protections beyond the federal Fair Housing Act, such as sexual orientation and gender identity or expression.

Prohibits housing discrimination based on the source of lawful income used to pay rent or a mortgage, including Section 8 vouchers.

The Division on Civil Rights (DCR), within the Department of Law and Public Safety (Attorney General).

Refusing to show or sell homes to members of a protected class — violates the NJ LAD and is grounds for NJREC discipline.

When income-producing/business real estate is sold, the buyer may need to notify the Division of Taxation so the State can claim the seller's unpaid tax.

For pre-1978 housing, the seller discloses known lead paint, gives the EPA pamphlet, and allows a 10-day inspection window (federal law applied in NJ).

Disclose known latent material defects not readily observable; a licensee may not conceal or misrepresent them (Weintraub v. Krobatsch).

Ads must name the brokerage firm (no blind ads) and be truthful; a salesperson advertises only with the sponsoring broker's authority (N.J.A.C. 11:5-6.1).

A co-ownership form for married couples and civil-union partners with right of survivorship and protection from one spouse's individual creditors.

The sponsoring broker holds the salesperson's license; the salesperson works under the broker's supervision.

An additional fee on certain residential sales above $1,000,000, generally paid by the buyer (separate from the Realty Transfer Fee).

An advertisement that fails to disclose the brokerage firm — prohibited in New Jersey.

The employing broker must certify a salesperson's license application; the license is issued only through that broker.

New Jersey uses judicial foreclosure — the lender forecloses a mortgage through the courts.

The promissory note is the borrower's promise to repay; the mortgage is the security instrument that creates the lien on the property.

A national/general portion plus a New Jersey state-specific portion covering license law, agency, attorney review, escrow, and state disclosures.

The signed CIS the consumer returns; the firm keeps it as a transaction record for six years.

A licensee's unlawful appropriation of money or property of another — grounds for discipline and a basis for a Guaranty Fund claim.

A license that is not affiliated with a broker; a licensee may not practice or be paid commission while inactive.

The individual broker responsible for the brokerage's compliance and for designating agents within the firm.

All real estate advertising must be honest and not misleading, in addition to naming the brokerage firm.

CE must be completed before the cycle deadline (June 30) to avoid a late fee or inactive status.

Federal Fair Housing Act: 7 classes. NJ LAD: those plus sexual orientation, gender identity, marital/civil-union status, ancestry, nationality, and lawful source of income.

Deeds are recorded with the county recording officer, where the Realty Transfer Fee is also paid.

A private trade association of real estate professionals — not the regulator. The NJREC, within DOBI, is the licensing authority.

The Commission may suspend or revoke a license, levy fines, and order other penalties for license-law violations (N.J.S.A. 45:15-17).

During attorney review, either party may have an attorney review the contract; if neither does within three business days, it becomes binding.

Designated agency uses separate licensees in one firm for each party (full loyalty); disclosed dual agency has one firm represent both with written consent.

Funds of others must be held at an authorized New Jersey financial institution, segregated from the broker's business and personal accounts.

Limited reciprocity may waive part of the three-year experience requirement for certain out-of-state broker applicants.

Land, everything permanently attached to it (improvements and fixtures), and the bundle of legal rights of ownership.

Movable property not permanently attached to land; transfers by a bill of sale, not a deed.

Possession, use (enjoyment), exclusion, disposition (transfer), and control.

Personal property attached to real property so as to become part of it and transfer with the land.

Method of attachment, Adaptability, Relationship of the parties, Intention, and Agreement.

The most complete ownership — absolute, of unlimited duration, and freely transferable by deed or will.

An estate measured by someone's lifetime; the holder cannot will it, and it ends at death.

A nonpossessory right to use another's land for a specific purpose, such as a driveway or utility line.

An easement benefiting an adjacent parcel (the dominant tenement) and burdening another (the servient tenement).

Any claim, lien, charge, or right that limits an owner's title — liens, easements, encroachments, deed restrictions.

An improvement that unlawfully extends onto a neighbor's land; usually revealed by a survey.

Government's authority to regulate land for public health, safety, and welfare — zoning and codes, with no payment to the owner.

Government's power to take private property for public use through condemnation, paying just compensation.

Reversion of property to the state when an owner dies with no will and no heirs.

Police power, Eminent domain, Taxation, and Escheat — only eminent domain pays the owner.

Metes and bounds, the rectangular (government) survey system, and lot-and-block.

The rights of a landowner whose property borders a flowing waterway, such as a river or stream.

The rights of a landowner whose property borders a static body of water, such as a lake, ocean, or bay.

Sole ownership by one person or entity.

Co-ownership with the right of survivorship; requires the four unities of time, title, interest, and possession.

On a co-owner's death, that share passes automatically to the surviving co-owners, not to heirs.

Co-ownership with no survivorship; each owner holds an undivided, willable share.

Time, Title, Interest, and Possession — all four are required to create a joint tenancy.

NJ co-ownership for spouses/civil-union partners with survivorship and protection from one spouse's individual creditors.

Gives the most protection; the grantor warrants clear title against all defects, even those before the grantor's ownership.

A common NJ deed; the grantor covenants only against defects arising during the grantor's own ownership.

Conveys only whatever interest the grantor has, with no warranties; often used to clear a cloud on title.

Delivery by the grantor and acceptance by the grantee; only the grantor signs the deed.

Filing the deed with the county recording officer; it gives constructive notice and sets priority but does not transfer title.

Notice the law presumes everyone has of recorded documents, whether or not they actually read them.

A policy protecting the insured against loss from title defects that existed before the policy date.

Acquiring title by open, notorious, continuous, hostile, and exclusive possession for the statutory period.

A will directs how property passes at death; dying intestate (no will) means state law decides, and escheat applies if there are no heirs.

A claim or encumbrance that may impair title; often cleared with a quitclaim deed or a quiet-title action.

The recorded history of ownership of a parcel, traced through successive conveyances.

The most probable price a property should bring in a competitive, open market under fair-sale conditions — an opinion of value.

Market value is an opinion of the likely price; market price is the actual price a property sold for.

An impartial, supported opinion of value by a licensed appraiser as of a specific date, following USPAP.

A licensee's value estimate from recent comparable sales to help price a listing — not a formal appraisal.

The legal, possible, feasible, and most profitable use of a site — the basis of value.

A buyer will pay no more than the cost of an equally desirable substitute property; underlies the sales comparison approach.

Compare the subject to recently sold similar properties and adjust for differences; best for homes.

Land value plus the cost to rebuild the improvements new, minus depreciation; best for new or special-use property.

Value = net operating income ÷ capitalization rate; best for income-producing property.

Effective gross income minus operating expenses, before any mortgage payment.

Net operating income ÷ value; a higher cap rate implies more risk and a lower value.

Weighing the three approaches' indications into one final opinion of value — not averaging them.

Loss in value from physical deterioration, functional obsolescence, or external obsolescence.

Combining adjacent parcels (assemblage) can create added value (plottage) greater than the sum of the parts.

A quick value estimate: GRM = price ÷ gross rent; value = gross rent × GRM. Used for small income properties.

Mutual agreement (offer and acceptance), consideration, legal purpose, and competent parties.

Requires real estate sale contracts (and most leases over a year) to be in writing to be enforceable.

Void = missing an essential element and unenforceable; voidable = a party may rescind (e.g., a minor's contract).

A buyer's good-faith deposit showing serious intent; held in trust and usually applied to the price at closing.

A condition that must be satisfied for a contract to become binding (financing, inspection, appraisal).

A court order making a defaulting seller complete the sale, available because land is unique.

A pre-agreed amount (often the deposit) a party keeps if the other defaults.

A contract employing a broker to find a buyer for the owner's property in exchange for compensation.

The listing broker earns the commission no matter who finds the buyer.

The broker earns the commission unless the owner sells the property themselves.

Only the broker who actually finds the buyer earns the commission.

The broker keeps any amount above the seller's set price — a conflict of interest, disfavored or banned.

A fiduciary relationship in which an agent represents a principal in dealings with third parties.

Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable care.

An agent must keep a client's confidential information private, and this duty survives the end of the relationship.

The principal is the client the agent represents; a customer is a party the agent deals with but does not represent.

Representing both buyer and seller; lawful only with the informed written consent of both parties (in NJ, via the CIS).

Express agency is created by a written or oral agreement; implied agency arises from the parties' conduct.

The broker whose efforts actually bring about the sale — the one entitled to the commission in a dispute.

Bilateral = a promise for a promise (sales contract); unilateral = a promise for performance (an open listing).

A contract giving a buyer the right, but not the obligation, to buy within a set time at a set price for consideration.

Substituting a new contract or party for an old one, releasing the original party from the obligation.

Bans housing discrimination based on race, color, religion, national origin, sex, familial status, and disability.

Race, color, religion, national origin, sex, familial status, and disability — seven classes.

Guiding buyers toward or away from neighborhoods based on a protected class — a fair-housing violation.

Inducing panic selling by suggesting a protected class is moving into an area — illegal.

A lender refusing to lend or insure in an area based on its makeup — illegal.

A change in rules or services so a person with a disability can use housing, such as allowing a service animal.

The NJ Law Against Discrimination protects more classes, including sexual orientation, gender identity, and source of lawful income.

Commission rates are always negotiable; fixing them with competitors is illegal price-fixing (antitrust).

Price-fixing, group boycotts, market allocation, and tie-in arrangements among competing brokers.

To hold client funds, like earnest money, separate from the broker's own money.

A lease conveys the right to use property for a term in exchange for rent; the landlord is the lessor and the tenant the lessee.

A contract employing a broker to manage an owner's property for compensation, creating an agency relationship.

Puffing is opinion or sales talk; misrepresentation is a false statement of material fact — only the latter is actionable.

Licensees must follow telemarketing and truthful-advertising rules; NJ also bans blind ads.

Requires accessibility in public accommodations and commercial facilities — relevant to commercial real estate.

A fact that would affect a reasonable buyer's decision or the price they would pay; it must be disclosed.

A hidden physical defect not discoverable by ordinary inspection; a known latent defect must be disclosed.

A NJ case establishing a seller's duty to disclose known latent material defects not readily observable.

'Let the buyer beware' — now limited by disclosure law and the duty to reveal known latent defects.

For pre-1978 housing: disclose known lead paint, give the EPA pamphlet, and allow a 10-day inspection window for sales.

Test the untreated private well water and review the results with the buyer before closing (a right-to-know law).

For new construction, notice that lists of off-site conditions are at the municipal clerk's office.

An odorless, radioactive gas from soil that can accumulate indoors; commonly tested and disclosed.

A hazardous material in old insulation/flooring; managed by removal or encapsulation.

Grows in damp areas; may require disclosure and remediation.

Can leak and contaminate soil and groundwater, creating cleanup liability — a NJ concern with older heating-oil tanks.

A property psychologically impacted by an event (e.g., a death); state law governs whether disclosure is required.

The borrower's written promise to repay the loan; the personal obligation in a financing.

The security instrument that creates a lien on the property; New Jersey uses a mortgage and note.

New Jersey's process — a lender forecloses a mortgage through the courts.

Loan amount ÷ value (or price); a higher LTV means a smaller down payment and more lender risk.

Usually required on a conventional loan when the LTV is above 80%; protects the lender.

A loan not insured or guaranteed by the government; may require PMI above 80% LTV.

A government-insured loan with lower down payments and flexible qualifying.

A loan guaranteed by the Department of Veterans Affairs for eligible veterans, often with 0% down.

The Real Estate Settlement Procedures Act — requires loan-cost disclosures and prohibits kickbacks at closing.

The Truth in Lending Act — requires disclosing the cost of credit, including the annual percentage rate (APR).

Loan Estimate within 3 business days of application; Closing Disclosure at least 3 business days before closing.

Generally first to record is first in priority; property-tax liens take priority over most others.

A loan clause letting the lender demand the full balance immediately upon default.

Commission = sale price × commission rate. A $300,000 sale at 6% = $18,000.

Price = net ÷ (1 − commission rate). A $282,000 net at 6% = $282,000 ÷ 0.94 = $300,000.

LTV = loan ÷ value. An 80% LTV on a $300,000 home is a $240,000 loan.

Area = length × width (in square feet for a lot or building footprint).

43,560 square feet = 1 acre. Convert square feet to acres by dividing by 43,560.

5,280 feet = 1 mile. Memorize it; it is not provided at the test center.

1 section = 1 square mile = 640 acres; 1 township = 36 sections (6 mi × 6 mi).

Assessed value × tax rate. Read the rate carefully (per $100, per $1,000, or a percent).

Splitting taxes, rent, or interest by the days each party owns the property; the problem specifies the day count and who owns closing day.

Value = net operating income ÷ capitalization rate. NOI of $90,000 at a 9% cap rate = $1,000,000.

Percent gain = (sale price − cost) ÷ cost. A $200,000 cost sold for $230,000 is a 15% gain.

One mill equals one-thousandth of a dollar ($0.001) of assessed value; a tax of 20 mills = 0.020 × assessed value.