The broker, unless the owner sells it themselves

Only the broker who actually finds the buyer

Broker keeps the amount above the seller's set price — a conflict of interest

Guiding buyers toward or away from areas by protected class

Inducing panic selling by claiming a protected class is moving in

A lender refusing to lend or insure in an area by its makeup

Pre-1978 housing; federal disclosure + EPA pamphlet + 10-day test window

NJ new construction: notice that lists are at the municipal clerk's office

Odorless radioactive gas from soil; can accumulate indoors

Underground storage tank

Can leak and contaminate soil and groundwater

Which agency regulates real estate in New Jersey?

The New Jersey Real Estate Commission (NJREC) licenses and regulates brokers and salespersons. The Commission is housed within the Department of Banking and Insurance (DOBI) — not the Division of Consumer Affairs — and administers the Real Estate License Act, N.J.S.A. 45:15, and the rules at N.J.A.C. 11:5.

How much education do I need before the New Jersey salesperson exam?

New Jersey requires 75 hours of pre-licensing education at a Commission-licensed real estate school before you sit for the salesperson exam. You must pass the exam and submit a complete license application within one year of finishing the 75-hour course, be at least 18 with a high-school-equivalent education, and have a sponsoring broker.

What is the New Jersey Consumer Information Statement (CIS)?

The CIS is the NJREC-approved disclosure that a licensee must present at first contact, before any confidential information is shared. It describes five possible business relationships: seller's agent, buyer's agent, disclosed dual agent, designated agent, and transaction broker. A firm may act as a disclosed dual agent only with the informed written consent of both parties.

How does attorney review work on a New Jersey real estate contract?

Licensee-prepared contracts for one-to-four-family homes and vacant one-family lots include an attorney-review clause. Either party's attorney has three business days — excluding weekends and legal holidays — after a fully signed copy is delivered to disapprove the contract for any reason. A disapproval must be sent with proof of delivery; otherwise the contract becomes binding.

How often do I renew a New Jersey real estate license, and how much CE is required?

New Jersey licenses run on a two-year term that begins July 1 of odd-numbered years. Active salespersons and brokers must complete 12 CE credits per term, at least 6 in core topics — including 2 credits in ethics, 1 in agency, and 1 in fair housing and the NJ Law Against Discrimination. Confirm current CE categories and renewal fees with the NJREC.

What is the New Jersey Real Estate Guaranty Fund?

The Guaranty Fund (N.J.S.A. 45:15-34 et seq.) reimburses people who win a final court judgment against a licensee for embezzlement, conversion, or unlawfully obtaining money in a brokerage transaction but cannot collect it. The maximum recovery is $20,000 per transaction for causes of action accruing after the 1993 amendment, after the claimant exhausts other remedies.

What New Jersey disclosures should I know for the exam?

Know the Off-Site Conditions Disclosure Act for new construction (notice that off-site lists are at the municipal clerk's office), the Private Well Testing Act for property on a private well, the Megan's Law statement, the federal lead-based-paint rule for pre-1978 housing, and the common-law duty to disclose known latent material defects (Weintraub v. Krobatsch). The NJ LAD also protects more classes than the federal Fair Housing Act.

Is this New Jersey real estate study guide free?

Yes — the full guide, the checkpoints, the glossary, the practice questions, and the flashcards are 100% free, with no account required.

Who regulates real estate licensees in New Jersey?

The New Jersey Real Estate Commission (NJREC) licenses and regulates real estate brokers and salespersons. The Commission is housed within the Department of Banking and Insurance (DOBI) — not Consumer Affairs — and administers the Real Estate License Act, N.J.S.A. 45:15, and its rules at N.J.A.C. 11:5. This is a New Jersey regulatory-framework concept. Don't confuse the NJREC with the Division of Consumer Affairs or a trade association such as New Jersey Realtors®. New Jersey real estate law flows from the statute (N.J.S.A. 45:15) to the Commission's rules (N.J.A.C. 11:5) to the NJREC, which enforces both.

What education must you complete before the New Jersey salesperson exam?

New Jersey requires a salesperson applicant to complete 75 hours of pre-licensing education at a Commission-licensed real estate school before sitting for the licensing exam. The examination must be passed and the license application submitted within one year of completing that 75-hour course. This is a New Jersey licensing concept. The applicant must be at least 18 years old, hold the equivalent of a high school education, and have a license issued only through a sponsoring broker. A broker applicant generally needs three years of full-time experience as a licensed New Jersey salesperson first.

What is the Consumer Information Statement (CIS) and when is it provided in New Jersey?

The Consumer Information Statement (CIS) is the NJREC-approved disclosure that explains the possible business relationships a licensee may have. Under N.J.A.C. 11:5-6.9, the licensee must present the CIS at first contact — before discussing the consumer's motivation, finances, or price, and before any confidential information is shared. This is a core New Jersey agency concept. The CIS describes five relationships: seller's agent, buyer's agent, disclosed dual agent, designated agent, and transaction broker. The licensee must obtain the consumer's signed acknowledgment of the CIS as soon as practicable, and the firm retains it as a transaction record.

When may a New Jersey firm act as a disclosed dual agent?

A New Jersey firm may act as a disclosed dual agent — representing both the buyer and the seller in the same transaction — only with the informed, written consent of both parties. Providing the CIS alone is not enough; the firm must obtain that written consent before the dual representation begins. This is a New Jersey agency concept. As an alternative, designated agency lets the broker of record appoint separate licensees within one firm to represent the buyer and seller individually, each owing full loyalty. A transaction broker, by contrast, represents neither party but must treat all parties honestly and competently.

How does the New Jersey attorney-review period work?

Most licensee-prepared New Jersey contracts for a one-to-four-family home or a vacant one-family lot include an attorney-review clause. Either party's attorney has three business days — excluding Saturdays, Sundays, and legal holidays — after a fully signed copy is delivered to disapprove the contract for any reason. This is a uniquely New Jersey concept (N.J.A.C. 11:5-6.2). The three-day clock starts only after a fully executed copy is delivered to both buyer and seller. A disapproval must be sent to the broker and the other party by a method that gives proof of delivery, such as fax, e-mail, personal delivery, or overnight mail; silence makes the contract binding.

How must a New Jersey broker handle deposit (escrow) money?

Under N.J.A.C. 11:5-5.1, a New Jersey broker must promptly deposit funds of others into a special trust or escrow account at an authorized New Jersey financial institution, separate from the broker's own funds. 'Promptly' means within five business days of receipt, and commingling is prohibited. This is a New Jersey escrow concept. When the buyer and seller dispute who is owed the deposit, the broker keeps the funds in trust until the parties agree in writing or a court orders disbursement. Brokers must keep trust-account ledgers and transaction records for six years (N.J.A.C. 11:5-5.4).

What is the New Jersey Real Estate Guaranty Fund?

The New Jersey Real Estate Guaranty Fund reimburses people who obtain a final court judgment against a licensee for embezzlement, conversion, or unlawfully obtaining money in a brokerage transaction but cannot collect it. The maximum recovery is $20,000 per transaction for causes of action accruing after the 1993 amendment. This is a New Jersey regulatory concept (N.J.S.A. 45:15-34 et seq.). The claimant must first reduce the claim to a final judgment, exhaust remedies against the licensee, and show inability to collect. It functions like Arizona's Recovery Fund or other states' guaranty funds, but the New Jersey statutory cap and procedures are state-specific.

How much continuing education does New Jersey require, and when does the license term run?

An actively licensed New Jersey salesperson or broker must complete 12 CE credits each two-year license term. At least 6 of those must be in core topics, including 2 credits in ethics, 1 in agency, and 1 in fair housing and the NJ Law Against Discrimination. The biennial term begins July 1 of odd-numbered years. This is a New Jersey licensing concept. CE must be completed before the cycle deadline (June 30) to avoid a late fee or inactive status. Confirm the exact CE categories and renewal fees on the NJREC website, as the Commission updates them periodically.

How is the New Jersey Realty Transfer Fee paid?

Under N.J.S.A. 46:15-7, the New Jersey Realty Transfer Fee is paid by the grantor (seller) to the county recording officer when the deed is recorded. It is computed on the consideration recited in the deed, at graduated rates stated per $500, with an additional fee on consideration over $150,000. This is a New Jersey settlement concept. The seller normally bears the basic fee, though certain transfers qualify for exemptions or reduced rates (for example, senior citizens or low-and-moderate-income housing). A separate 'mansion tax' may apply to certain residential sales above $1,000,000, generally paid by the buyer.

What must be disclosed about off-site conditions for newly built New Jersey homes?

Under New Jersey's New Residential Construction Off-Site Conditions Disclosure Act (N.J.S.A. 46:3C), a seller of newly constructed residential property must give the buyer, at contract signing, notice that lists of off-site conditions are maintained at the municipal clerk's office — within the municipality and within one-half mile of adjoining municipalities. This is a New Jersey disclosure concept that applies to new construction, not ordinary resales. The notice points the buyer to the maintained lists rather than listing each condition. Off-site conditions can include things such as landfills, contaminated sites, or other land uses that may affect the property.

What does the New Jersey Private Well Testing Act require?

Under the New Jersey Private Well Testing Act (N.J.S.A. 58:12A-26 et seq.), when residential property served by a private potable well is sold, the untreated well water must be tested for the required parameters and the results provided to and reviewed by the buyer before closing. This is a New Jersey environmental-disclosure concept. The PWTA is a right-to-know law: it requires testing and disclosure, but does not by itself require the seller to remediate a parameter that exceeds a standard. The NJ Department of Environmental Protection administers the PWTA and sets the testing parameters.

What does the Megan's Law statement in a New Jersey contract tell the buyer?

The standard Megan's Law statement in a New Jersey real estate contract advises that real estate licensees are not entitled to receive sex-offender notification from the county prosecutor and cannot obtain that information for buyers. The buyer is directed instead to the New Jersey State Police online sex-offender registry. This is a New Jersey disclosure concept. The statement protects the licensee while informing buyers where they can independently research registered offenders. It is one of several mandatory notices that appear in New Jersey purchase contracts alongside the attorney-review clause.

What are the four government powers over private property?

Even a fee-simple owner's rights are limited by four government powers, remembered as PETE: Police power (regulation such as zoning), Eminent domain (taking for public use with just compensation), Taxation (property taxes that become a lien), and Escheat (property reverts to the state when an owner dies with no will and no heirs). This is a Property Use concept. Police power supports zoning and building codes without compensating the owner; only eminent domain requires just compensation. In New Jersey, condemnation for a public taking is carried out under state law, and property taxes are administered at the municipal level.

What is the difference between joint tenancy and tenancy in common?

Both are forms of co-ownership. Joint tenancy carries the right of survivorship — a deceased owner's share passes automatically to the surviving joint tenants — and requires the four unities of time, title, interest, and possession. Tenancy in common has no survivorship; each owner holds a divisible share that can be willed to heirs. This is a Forms of Ownership concept. New Jersey also recognizes tenancy by the entirety for married couples and civil-union partners, which adds survivorship and protection from a single spouse's individual creditors. Severalty is sole ownership by one person or entity.

Which deed gives a buyer the most protection?

A general warranty deed gives the most protection: the grantor warrants clear title against all defects, even those arising before the grantor owned the property, and promises to defend the title. A special (limited) warranty deed (a 'bargain and sale deed with covenants' in New Jersey usage) covers only the grantor's own ownership; a quitclaim deed gives no warranties. This is a Transfer of Title concept. A deed must be delivered by the grantor and accepted by the grantee to transfer title; recording it then gives constructive notice to the public. In New Jersey, deeds are recorded with the county recording officer, and the Realty Transfer Fee is paid at recording.

How does the income (capitalization) approach estimate value?

The income approach converts a property's income into value using the formula value = net operating income ÷ capitalization rate. Net operating income is effective gross income minus operating expenses, before any mortgage payment. A higher cap rate signals more risk and produces a lower value. This is a Property Value and Appraisal concept. It is the primary approach for income-producing property such as apartments and commercial buildings. The other two approaches are the sales comparison approach (comparable sales) and the cost approach (land value plus replacement cost minus depreciation).

What fiduciary duties does an agent owe a client?

An agent owes the principal fiduciary duties, remembered as OLD CAR: Obedience to lawful instructions, Loyalty (the client's interests first), Disclosure of material facts, Confidentiality, Accounting for money and property, and Reasonable care and skill. These duties define the trust at the heart of an agency relationship. This is a Laws of Agency concept. Confidentiality survives even after the relationship ends, while honesty and fair dealing are owed to all parties, including customers. In New Jersey a salesperson exercises these duties under a sponsoring broker's supervision, and the CIS tells the consumer which relationship applies.

Who must comply with the federal lead-based paint disclosure rule?

Sellers and landlords of most housing built before 1978 must disclose any known lead-based paint and hazards, give buyers or renters the EPA pamphlet, and — for sales — allow a 10-day window to test for lead. The rule comes from the 1992 Residential Lead-Based Paint Hazard Reduction Act (Title X) and applies in New Jersey. This is a Property Disclosures concept that applies in New Jersey alongside the state's own disclosure duties. The 10-day inspection opportunity applies to sales; the parties may agree in writing to a different length. Other commonly disclosed New Jersey environmental items include private-well results (PWTA) and known latent material defects.

What does RESPA require at a real estate closing?

The Real Estate Settlement Procedures Act (RESPA) governs closings on most federally related mortgage loans. It requires lenders to disclose settlement costs, gives borrowers a Loan Estimate and a Closing Disclosure, and prohibits kickbacks and unearned referral fees among settlement-service providers. This is a Financing and Settlement concept. The Loan Estimate is due within three business days of application; the Closing Disclosure must reach the borrower at least three business days before closing. RESPA's anti-kickback rule is why a New Jersey licensee cannot accept an undisclosed fee for steering a client to a particular title, escrow, or mortgage company.

How do you calculate a real estate commission?

A commission is the sale price multiplied by the commission rate. A $300,000 sale at a 6% rate produces an $18,000 total commission. That total is then split — first between the listing and cooperating brokerages, then between each brokerage and its agent — by applying each percentage in turn. This is a Real Estate Math concept. To find a price for a target net to the seller, divide the net by (1 − commission rate): a $282,000 net at 6% needs a price of $282,000 ÷ 0.94 = $300,000. In New Jersey, commission is paid to the sponsoring broker, who then compensates the salesperson — a salesperson may not be paid commission directly by a client.

New Jersey Real Estate Commission (NJREC)

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

Department of Banking and Insurance (DOBI)

The New Jersey cabinet department that contains the New Jersey Real Estate Commission — not the Division of Consumer Affairs.

The New Jersey Real Estate License Act — the statute that governs the licensing and regulation of brokers and salespersons and gives the NJREC its authority.

The New Jersey Administrative Code rules the Commission adopts to implement the statute — covering agency and the CIS, trust accounts, advertising, records, continuing education, and conduct.

The licensed New Jersey broker who employs or contracts with a salesperson and must certify the salesperson's application; a salesperson cannot operate independently of a broker.

A firm representing both buyer and seller in the same transaction — permitted in New Jersey only with the informed written consent of both parties.

FREE New Jersey Real Estate Exam Study Guide 2026

This free New Jersey real estate exam study guide covers both content areas of the New Jersey salesperson licensing exam — the New Jersey state-specific law enforced by the and the national/general principles tested across the country.^[1]New Jersey’s state law has several features you will not see in other states, so we teach it first.

The exam is administered by PSI, and you generally need 70% to pass.^[4] It’s interactive, not a wall of text: every area has a built-in checkpoint quiz, hover-able glossary terms, worked math examples, and concept questions.

Read the guide area by area, test yourself at each checkpoint, then round out your free prep with our New Jersey practice questions and flashcards. Three things reward the most study time on the state side: NJREC license law, the CIS and agency, and the attorney-review process.

New Jersey Real Estate Exam Snapshot

New Jersey salesperson exam at a glance (2026)
Detail	New Jersey salesperson exam
Regulator	New Jersey Real Estate Commission (NJREC), within the Department of Banking and Insurance (DOBI)
Governing law	Real Estate License Act, N.J.S.A. 45:15; rules at N.J.A.C. 11:5
Testing provider	PSI
Passing score	70% (national and New Jersey state content combined)
Pre-license education	75 hours at a Commission-licensed school; pass and apply within one year
Basic requirements	At least 18, high-school-equivalent education, sponsoring broker
License term & CE	Two-year term beginning July 1 of odd years; 12 CE credits (6 core, incl. 2 ethics)
Records retention	Brokers keep transaction records and CIS forms for six years

Confirm the current question count, time limit, fees, and education rules in the PSI candidate bulletin and with the NJREC before you test — New Jersey updates its requirements periodically.^[3]^[4] The weighting below reflects how this guide allocates study time across the New Jersey state law and the national content areas:

New Jersey salesperson exam content emphasis (2026)

NJ License Law & Practice (NJREC, N.J.S.A. 45:15)23% · State portion

Contracts & Agency (incl. the CIS)13% · Largest national area

Real Property, Legal Descriptions & Use9% · National

Property Value & Appraisal9% · National

Forms of Ownership & Transfer of Title9% · National

Real Estate Practice & Fair Housing9% · National + NJ LAD

Disclosures & Environmental Issues9% · National + NJ disclosures

Financing & Settlement9% · National

Real Estate Math10% · Both portions

Treat the percentages as a planning guide rather than the official blueprint — the PSI bulletin lists the exact item counts.^[4] This guide teaches the New Jersey state law first, then all eight national content areas, each ending in a checkpoint quiz.

One PSI exam, two content areas — New Jersey salesperson

National / General portionGeneral real estate principles tested across the country — property, ownership, value, contracts, agency, finance, and math.

New Jersey State portionNew Jersey license law (N.J.S.A. 45:15), Commission rules, CIS agency, attorney review, escrow, the Guaranty Fund, disclosures, and the Law Against Discrimination.

The New Jersey salesperson exam is administered by PSI; you generally need 70% to pass. Confirm the current question count and time with the PSI candidate handbook.

1 · NJREC, License Law & the Guaranty Fund (New Jersey)

The heart of the New Jersey state content. Who regulates real estate in New Jersey, how you become and stay licensed, the trust-account and record rules a licensee must follow, and the Guaranty Fund that protects the public.^[2]

New Jersey’s real estate regulatory framework

New Jersey real estate law flows from the statute to the rules to the Commission that enforces them. The state portion of the exam is built on this stack.

N.J.S.A. 45:15 — Real Estate License ActNew Jersey's real estate license law, passed by the Legislature, governing the licensing and regulation of brokers and salespersons.
N.J.A.C. 11:5 — Commission RulesAdministrative rules adopted by the Commission to implement the statute — CE, agency/CIS, trust accounts, advertising, records, and conduct.
New Jersey Real Estate Commission (NJREC)The regulator that licenses and disciplines real estate licensees — housed within the Department of Banking and Insurance (DOBI).
Department of Banking and Insurance (DOBI)The cabinet-level department that contains the NJREC; not Consumer Affairs and not the Division of Revenue.

The NJREC sits within DOBI — not the Division of Consumer Affairs.

NJREC, DOBI & N.J.S.A. 45:15

The regulates licensees under , the Real Estate License Act, with rules at . The Commission is housed within the — a common exam trap is confusing it with the Division of Consumer Affairs. The NJREC issues licenses, audits brokers, and disciplines licensees.

New Jersey Licensing & Education

To be licensed, a salesperson completes a 75-hour pre-license course at a Commission-licensed school, then passes the PSI exam and applies within one year of finishing the course.^[3] An applicant must be at least 18, hold the equivalent of a high school education, and work under a — a salesperson can never operate independently. A broker license generally requires three years of full-time salesperson experience first.

The path to a New Jersey salesperson license

1 · 75-hour pre-license courseComplete a 75-hour pre-licensing education course at a Commission-licensed New Jersey real estate school.
2 · Pass the PSI licensing examPass the salesperson examination (national + New Jersey state portions) within one year of completing the course.
3 · Meet the basic requirementsBe at least 18 years old with the equivalent of a high school education and good moral character.
4 · Secure a sponsoring brokerA salesperson license is issued only through a sponsoring NJ broker, who must certify the application.
5 · Apply to the NJRECSubmit the application and fees; the license is issued under the employing broker and held by the broker.

A salesperson must always work under a sponsoring broker — never independently. A broker license generally requires three years of full-time experience first.

Trust Accounts, Records & Discipline

A broker must promptly place funds of others — like — into a separate at an authorized New Jersey financial institution. Under N.J.A.C. 11:5-5.1, “promptly” means within five business days, and client funds with the broker’s own is prohibited.

When the parties dispute a deposit, the broker holds the funds until they agree in writing or a court orders release. Brokers keep transaction records and acknowledged CIS forms for six years.

The Real Estate Guaranty Fund

The reimburses the public when someone wins a final court judgment against a licensee for embezzlement, conversion, or unlawfully obtaining money but cannot collect it.^[2] The claimant must first obtain a final judgment, exhaust remedies against the licensee, and show inability to collect. The maximum recovery is $20,000 per transaction for causes of action accruing after the 1993 amendment.

Checkpoint · Area 1 · NJREC & New Jersey License Law

Question 1 of 10

Which state agency licenses and regulates real estate salespersons and brokers in New Jersey?

2 · New Jersey Agency (CIS), Attorney Review & Disclosure

The most distinctively New Jersey material.How agency is disclosed through the CIS, the three-business-day attorney-review period, the state’s special disclosures and transfer fee, and the Law Against Discrimination.^[3]

The Consumer Information Statement (CIS)

Under N.J.A.C. 11:5-6.9, a licensee must present the at first contact— before discussing the consumer’s motivation, finances, or price, and before any confidential information is shared. The CIS describes five business relationships: , , , , and . A firm may act as a disclosed dual agent only with the informed written consent of both parties.

The five New Jersey CIS business relationships

Under N.J.A.C. 11:5-6.9, a licensee must present the Consumer Information Statement (CIS) at first contact and explain these five possible relationships before any confidential information is shared.

🤝Seller's agentRepresents and owes full fiduciary duties to the seller (the listing side).

🤝Buyer's agentRepresents and owes full fiduciary duties to the buyer.

🤝Disclosed dual agentRepresents both buyer and seller — only with the informed written consent of both parties.

🤝Designated agentThe broker of record designates separate licensees within one firm to represent the buyer and the seller individually.

🤝Transaction brokerWorks with a buyer and/or seller without representing either party; honest and competent but not a fiduciary.

Dual agency needs the informed written consent of both parties — the CIS alone is not enough.

The Attorney-Review Period

A licensee-prepared contract for a one-to-four-family home or a vacant one-family lot must contain an .^[3]Either party’s attorney has three business days — excluding Saturdays, Sundays, and legal holidays — after a fully signed copy is delivered to both parties to disapprove the contract for any reason. A disapproval must be sent to the broker and the other party by a method giving proof of delivery (fax, e-mail, personal delivery, or overnight mail); if no one objects, the contract becomes binding.

The New Jersey attorney-review timeline

1 · Licensee prepares the contractA licensee-prepared contract for a 1-to-4-family home or vacant 1-family lot must contain the attorney-review clause.
2 · Fully signed copy deliveredThe three-business-day clock starts only after a fully executed copy is delivered to both the buyer and the seller.
3 · Three business days to reviewEither party's attorney may approve, disapprove for any reason, or propose changes — excluding weekends and legal holidays.
4 · Notice or it becomes bindingA disapproval must be sent with proof of delivery (fax, e-mail, personal delivery, overnight); silence makes the contract binding.

Attorney review (N.J.A.C. 11:5-6.2) is a uniquely New Jersey feature — three business days, for any reason.

NJ Disclosure & the Realty Transfer Fee

New Jersey layers several disclosures onto a sale. The requires a seller of newly builthomes to give notice at contract signing that lists of off-site conditions are kept at the municipal clerk’s office.

The requires testing of a private potable well before closing.^[5] The directs buyers to the State Police registry. At recording, the seller pays the to the county recording officer.

The New Jersey disclosure stack

New Jersey requires disclosure of known latent material defects (e.g., Weintraub v. Krobatsch), and layers several statutory notices on top. These are the documents the state exam tests most.

📄Off-site conditions notice (N.J.S.A. 46:3C)For newly built homes — notice at contract signing that lists of off-site conditions are at the municipal clerk's office (within the town and 1/2 mile of adjoining towns).

📄Megan's Law statementAdvises that licensees cannot obtain sex-offender registry data; the buyer may consult the NJ State Police online registry.

📄Private Well Testing Act (N.J.S.A. 58:12A)Property on a private potable well must have the untreated water tested and the results given to and reviewed by the buyer before closing.

📄Federal lead-based paint disclosureFor housing built before 1978 — disclose known lead paint, give the EPA pamphlet, and allow a 10-day inspection window.

A licensee may not conceal or misrepresent a known latent defect, even where a formal disclosure form is not mandated.

The NJ Law Against Discrimination

The (N.J.S.A. 10:5) protects more classes than the federal — adding sexual orientation, gender identity or expression, marital/civil-union status, ancestry, and source of lawful income (including Section 8 vouchers).^[6] The enforces it. , blockbusting, and redlining violate both the federal and state laws and are grounds for NJREC discipline.

Key takeaways

Present the CIS at first contact (N.J.A.C. 11:5-6.9); it describes five relationships — seller's agent, buyer's agent, disclosed dual agent, designated agent, transaction broker.
Disclosed dual agency requires the informed written consent of both parties — the CIS alone is not enough.
Attorney review: three business days, for any reason, starting after a fully signed copy is delivered to both parties (1-to-4-family homes and vacant 1-family lots).
Know the NJ disclosures: off-site conditions (new construction), Private Well Testing Act, Megan's Law statement, and the Realty Transfer Fee (paid by the seller at recording).
The NJ LAD protects more classes than the federal Fair Housing Act, including sexual orientation, gender identity, and source of lawful income.

Checkpoint · Area 2 · New Jersey Agency, Attorney Review & Disclosure

Question 1 of 10

Under New Jersey law, when must the Consumer Information Statement (CIS) on real estate relationships first be addressed with a consumer?

3 · Property, Legal Descriptions & Land Use

National content area.What real property is, the estates and rights an owner can hold, the government’s powers over land, and how land is legally described.^[10]

Estates & the Bundle of Rights

is land, everything permanently attached to it (including ), and the . The largest estate is — absolute and inheritable. Use the MARIA tests (Method of attachment, Adaptability, Relationship, Intention, Agreement) to tell a fixture from personal property.

Government Powers & Encumbrances

Even fee simple is limited by four government powers, remembered as PETE: (zoning, codes), (with just compensation), taxation, and . An — a lien, , or deed restriction — limits title.

The four government powers — “PETE”

Every owner’s rights are subject to four powers of government. Note the key contrast: only eminent domain requires the government to pay the owner.

PPolice powerRegulate land for public health, safety & welfare — zoning, building codes. No payment to the owner.

EEminent domainTake property for public use through condemnation — but pay just compensation.

TTaxationLevy property taxes; unpaid taxes become a lien with high priority.

EEscheatProperty reverts to the state when an owner dies with no will and no heirs.

Legal Descriptions

Three methods describe land precisely: , the rectangular (government) survey system (townships, ranges, and ), and lot-and-block. One is 640 acres and one is 43,560 square feet.

The rectangular survey system — a township of 36 sections

1 township
6 mi × 6 mi = 36 sections

1 section
1 sq mile = 640 acres

1 acre
43,560 square feet

Memorize for the exam: 43,560 sq ft/acre and 5,280 ft/mile — these are not provided at the test center.

Checkpoint · Area 3 · Property, Legal Descriptions & Land Use

Question 1 of 10

A subdivision developer wants the shortest, most efficient way to describe hundreds of newly created residential lots in deeds. Which legal description method is best suited for this purpose?

4 · Ownership, Title Transfer & Recording

National content area. How people co-own property in New Jersey, how a deed transfers title, and how recording protects ownership.^[10]

Forms of Ownership in New Jersey

The key difference is the right of survivorship. has it and needs the four unities; does not, so each share passes by will. New Jersey also recognizes for married couples and civil-union partners, which adds survivorship and protection from one spouse’s individual creditors.

Forms of ownership in New Jersey
Form	Survivorship?	Who can hold it
Severalty	N/A — sole owner	One person or entity
Tenancy in common	No — passes by will	Any number of co-owners
Joint tenancy	Yes — to survivors	Co-owners with the four unities
Tenancy by the entirety	Yes — to the surviving spouse	Married couples / civil-union partners

Deeds, Recording & Title Insurance

A deed conveys title from grantor to grantee. The gives the most protection; a gives none (a New Jersey deed of bargain and sale with covenants sits in between).

Title passes on delivery and acceptance, not on recording — but recording with the county recording officer gives constructive notice and sets priority. The seller pays the at recording, and protects against prior defects.

Checkpoint · Area 4 · Ownership, Title Transfer & Recording

Question 1 of 10

A homebuyer receiving a general warranty deed is told it includes a covenant against encumbrances. Which of the following situations would most directly breach that particular covenant?

5 · Property Value & Appraisal

National content area.What creates value, the three approaches an appraiser uses, and how a licensee’s CMA differs from a formal appraisal.^[10]

Value Principles

is the most probable price under fair conditions — an opinion, distinct from the actual market price. The basis of value is : the legal, possible, feasible, and most profitable use of a site. A helps price a listing; a formal is an impartial USPAP-compliant opinion by a licensed appraiser.

The Three Approaches to Value

An appraiser estimates value three ways, then reconciles them — weighing the indications, not averaging — into one final opinion.

The three approaches to estimating value

Sales comparison approachCompare the subject to recently sold similar properties; adjust for differences. Best for homes.Based on the principle of substitution.

Cost approachLand value + cost to rebuild the improvements new − depreciation. Best for new or special-use property.

Income (capitalization) approachValue = net operating income ÷ capitalization rate. Best for income-producing property.

The appraiser then reconciles the three indications into one final opinion of value — weighing them, not averaging.

Checkpoint · Area 5 · Property Value & Appraisal

Question 1 of 10

An appraiser inspects a thirty-year-old home and notes peeling paint, a worn roof, and an aging furnace that are all reasonable to repair. In the cost approach, this loss in value is classified as which of the following?

6 · Contracts & Agency (National)

The single largest national area. What makes a contract valid, the kinds of listing agreements, and the fiduciary duties at the heart of agency.^[10]

Contract Law & Listings

A valid needs mutual agreement, consideration, legal purpose, and competent parties — and, for real estate, writing under the . A missing essential element makes it void; a defect like a minor’s signature makes it voidable. In New Jersey, most resale contracts then enter the three-day period.

Types of listing agreements
Listing type	Who earns the commission
Exclusive right-to-sell	The listing broker — no matter who finds the buyer
Exclusive agency	The broker, unless the owner sells it themselves
Open listing	Only the broker who actually finds the buyer
Net listing	Broker keeps the amount above the seller's set price — a conflict of interest

Agency & Fiduciary Duties

is a fiduciary relationship between agent and principal. The duties are OLD CAR: Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable care. Confidentiality survives the end of the relationship. In New Jersey, the consumer learns which relationship applies through the CIS.

Checkpoint · Area 6 · Contracts & Agency (National)

Question 1 of 10

An exclusive right-to-sell listing typically names the property, the price, the commission, and a definite expiration date. If a listing agreement omits a definite termination date, what problem does that create in many states?

7 · Real Estate Practice & Fair Housing

National content area, with New Jersey’s broader fair-housing law. Fair housing, handling client money, and the leasing work a licensee does day to day.^[7]

Fair Housing

The (1968) bans discrimination based on race, color, religion, national origin, sex, familial status, and disability — seven federal protected classes.^[7] The protects more classes, including sexual orientation, gender identity, and source of lawful income, and is enforced by the . The classic violations are , blockbusting, and redlining.

Prohibited fair-housing practices
Practice	What it is
Steering	Guiding buyers toward or away from areas by protected class
Blockbusting	Inducing panic selling by claiming a protected class is moving in
Redlining	A lender refusing to lend or insure in an area by its makeup

Trust Funds, Leases & Conduct

A broker must keep client funds — like — in a separate ; is a violation. Commission rates are always negotiable, and fixing them with competitors is an antitrust violation. A licensee may not pay a commission to an unlicensed person. New Jersey advertising must name the brokerage firm — no blind ads — and be truthful.

Checkpoint · Area 7 · Real Estate Practice & Fair Housing

Question 1 of 10

Sex, disability, and familial status were added as protected classes to the federal Fair Housing Act after its original passage. Which class was the most recent of these additions, enacted in the 1988 amendments?

8 · Disclosures & Environmental Issues

National content area, with key New Jersey statutes. What a seller and agent must reveal, and the environmental hazards the exam expects you to recognize.^[9]

Material Facts & Property Disclosure

A — anything that would affect a buyer’s decision or price — must be disclosed, including known .

New Jersey case law (Weintraub v. Krobatsch) requires disclosure of known latent material defects not readily observable, and a licensee may not conceal or misrepresent them. The state also layers on the off-site conditions notice, the Private Well Testing Act, and the Megan’s Law statement.

Environmental Hazards

The most heavily tested federal rule is the : for housing built before 1978, the seller must disclose known lead paint, give the EPA pamphlet, and (for sales) allow a 10-day inspection window.^[9] New Jersey’s requires testing a private potable well before closing.^[5]

Disclosures & environmental hazards to recognize
Item	What to know
Lead-based paint	Pre-1978 housing; federal disclosure + EPA pamphlet + 10-day test window
Private Well Testing Act	NJ: test the untreated well water and review results with the buyer before closing
Off-site conditions	NJ new construction: notice that lists are at the municipal clerk's office
Radon	Odorless radioactive gas from soil; can accumulate indoors
Underground storage tank	Can leak and contaminate soil and groundwater

Checkpoint · Area 8 · Disclosures & Environmental Issues

Question 1 of 10

Why are wetlands given special protection that can limit a property owner's development plans?

9 · Financing & Settlement

National content area. The instruments that secure a loan, how foreclosure works, the main loan types, and what happens at closing.^[8]

Mortgages, Notes & Foreclosure

New Jersey is a mortgage / judicial-foreclosure state: the borrower signs a promissory note (the promise to repay) and a mortgage (the security instrument), and a lender forecloses through the courts. A buyer should understand liens, priority, and the difference between the note and the mortgage.

Loan Types, Lending Laws & Closing

Three loan types anchor the exam — conventional, FHA, and VA — and the measures lender risk. Two federal laws govern disclosure: requires settlement-cost disclosures and bans kickbacks, and requires disclosing the cost of credit, including the APR.^[8] At closing, funds are disbursed, the deed is recorded, and the seller pays the Realty Transfer Fee.

Checkpoint · Area 9 · Financing & Settlement

Question 1 of 10

At a residential closing, the seller has prepaid the homeowners association dues and property taxes for periods extending past the settlement date. The process of fairly dividing these prepaid and accrued expenses between buyer and seller as of the closing date is best described as which of the following?

10 · Real Estate Math

Tested on both portions. A handful of formulas cover almost every calculation: area, commission, seller net, loan-to-value, taxes, and proration.^[4]

Area, Commission & Net

Area of a rectangle is length × width; convert square feet to acres by dividing by 43,560. Commission = sale price × rate. To find the price for a target seller net, divide the net by (1 − rate).

Core real estate formulas
To find	Formula
Commission	Sale price × commission rate
Price for a target net	Net ÷ (1 − commission rate)
Loan-to-value (LTV)	Loan amount ÷ value (or price)
Value (income approach)	Net operating income ÷ capitalization rate
Annual property tax	Assessed value × tax rate

LTV, Taxes & Proration

is loan ÷ value. splits taxes, rent, and interest by the days each party owns the property — the seller is usually charged through the closing date. Exam math problems will specify whether to use a 360-day or 365-day year and who owns the closing day.

Checkpoint · Area 10 · Real Estate Math

Question 1 of 10

A house has a main floor of 1,800 square feet and a second story of 1,200 square feet. If the construction cost is estimated at $145 per square foot, what is the estimated cost to build the house?

How to Use This Study Guide

A study guide is a map, not the whole territory — pair it with our free New Jersey practice questions and flashcards. Because New Jersey’s state law is distinctive, lead with license law, the CIS, and attorney review, then layer in the national content areas and lock in the math.

A study loop that actually works

1
Read a content area here
Work through one area at a time, New Jersey law first, then the national portions.
2
Take the checkpoint
The quick check at the end of each area exposes what didn't stick.
3
Drill the gaps
Send your weak area straight into the free New Jersey practice questions and flashcards.
4
Take full, timed practice
Sit a full-length practice test to build stamina, then review every miss.

New Jersey Real Estate Concept Questions

Common New Jersey and national real estate principles the salesperson exam actually tests — covering NJREC license law, the CIS and agency, attorney review, escrow, the Guaranty Fund, the NJ Law Against Discrimination, and the national content areas. Tap any card for a short, exam-ready answer backed by an official source (NJREC, N.J.S.A./N.J.A.C., NJDEP, NJ DCR, HUD, CFPB, EPA, or IRS), then test yourself on them as flashcards.

New Jersey Real Estate Glossary

Quick definitions for the terms you’ll see most across the New Jersey real estate exam:

Acre: A unit of land area equal to 43,560 square feet.
Agency: A fiduciary relationship in which an agent represents a principal in dealings with third parties.
Appraisal: An impartial, supported opinion of value prepared by a licensed appraiser as of a specific date, following USPAP.
Attorney-review clause: A clause required in licensee-prepared New Jersey contracts for 1-to-4-family homes and vacant 1-family lots that gives either party's attorney three business days to disapprove the contract for any reason (N.J.A.C. 11:5-6.2).
Bundle of rights: The rights that come with ownership: possession, use (enjoyment), exclusion, disposition (transfer), and control.
Buyer's agent: A licensee or firm that represents and owes full fiduciary duties to the buyer in a transaction.
Capitalization rate: The rate of return on an income property: net operating income ÷ value. A higher cap rate implies more risk and lower value.
Commingling: Improperly mixing a client's escrow funds with the broker's own or business funds — a violation of N.J.A.C. 11:5-5.1.
Comparative market analysis (CMA): A licensee's estimate of value from recent comparable sales, used to help price a listing — not a formal appraisal.
Consumer Information Statement (CIS): The NJREC-approved disclosure a licensee must present at first contact, explaining the five possible business relationships before any confidential information is shared (N.J.A.C. 11:5-6.9).
Contingency: A condition that must be met for a contract to become binding, such as financing, inspection, or appraisal contingencies.
Contract: A legally enforceable agreement between competent parties to do or refrain from doing a lawful act.
Department of Banking and Insurance (DOBI): The New Jersey cabinet department that contains the New Jersey Real Estate Commission — not the Division of Consumer Affairs.
Designated agent: An arrangement in which the broker of record appoints separate licensees within one firm to represent the buyer and the seller individually, each owing full loyalty.
Disclosed dual agent: A firm representing both buyer and seller in the same transaction — permitted in New Jersey only with the informed written consent of both parties.
Division on Civil Rights (DCR): The New Jersey agency, within the Department of Law and Public Safety, that enforces the Law Against Discrimination in housing complaints.
Earnest money: A buyer's good-faith deposit showing serious intent; held in trust and usually applied to the price at closing.
Easement: A nonpossessory right to use another's land for a specific purpose, such as a driveway or utility line.
Eminent domain: Government's power to take private property for public use through condemnation, paying the owner just compensation.
Encumbrance: Any claim, lien, charge, or right that limits an owner's title — liens, easements, encroachments, and deed restrictions.
Escheat: The reversion of property to the state when an owner dies with no will and no legal heirs.
Fair Housing Act: The 1968 federal law prohibiting housing discrimination based on race, color, religion, national origin, sex, familial status, and disability.
Fee simple: The most complete form of ownership — absolute, of unlimited duration, and freely transferable by deed or will. Also called fee simple absolute.
Fiduciary duties: The duties an agent owes the principal — Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable care (OLD CAR).
Fixture: An item of personal property attached to real property so as to become part of it and transfer with the land. The MARIA tests decide whether an item is a fixture.
General warranty deed: The deed giving the most protection; the grantor warrants clear title against all defects, even those arising before the grantor's ownership.
Highest and best use: The legally permissible, physically possible, financially feasible, and most profitable use of a site — the basis of value.
Joint tenancy: Co-ownership with the right of survivorship; requires the four unities of time, title, interest, and possession.
Latent defect: A hidden physical defect not discoverable by ordinary inspection; a known latent defect must be disclosed (Weintraub v. Krobatsch).
Lead-based paint disclosure: The federal requirement that sellers and landlords of pre-1978 housing disclose known lead paint and give a 10-day inspection window for sales.
Listing agreement: A contract employing a broker to find a buyer for the owner's property in exchange for compensation.
Loan-to-value ratio (LTV): The loan amount divided by the property's value or price; a higher LTV means a smaller down payment and more lender risk.
Market value: The most probable price a property should bring in a competitive, open market under fair-sale conditions; an opinion of value.
Material fact: A fact that would affect a reasonable buyer's decision to buy or the price they would pay; in New Jersey a known latent material defect must be disclosed.
Megan's Law statement: A standard statement in NJ contracts advising that licensees cannot obtain sex-offender registry data; the buyer is directed to the NJ State Police online registry.
Metes and bounds: A legal description using distances (metes) and compass directions (bounds) traced back to a point of beginning.
N.J.A.C. 11:5: The New Jersey Administrative Code rules the Commission adopts to implement the statute — covering agency and the CIS, trust accounts, advertising, records, continuing education, and conduct.
N.J.S.A. 45:15: The New Jersey Real Estate License Act — the statute that governs the licensing and regulation of brokers and salespersons and gives the NJREC its authority.
Net operating income (NOI): Effective gross income minus operating expenses, before any mortgage payment; the income figure used in the income approach.
New Jersey Real Estate Commission (NJREC): The state body that licenses and regulates real estate brokers and salespersons, administering the Real Estate License Act (N.J.S.A. 45:15). It is housed within the Department of Banking and Insurance (DOBI).
NJ Law Against Discrimination (LAD): A New Jersey civil-rights law (N.J.S.A. 10:5) that prohibits housing discrimination on more bases than the federal Fair Housing Act — including sexual orientation, gender identity, and source of lawful income.
Off-Site Conditions Disclosure Act: A New Jersey law (N.J.S.A. 46:3C) requiring a seller of newly built residential property to give buyers notice, at contract signing, that lists of off-site conditions are kept at the municipal clerk's office.
Police power: Government's authority to regulate land for public health, safety, and welfare — the basis for zoning and building codes, with no payment to the owner.
Private Well Testing Act (PWTA): A New Jersey right-to-know law (N.J.S.A. 58:12A-26 et seq.) requiring that, when property on a private potable well is sold, the untreated water be tested and the results reviewed by the buyer before closing.
Proration: Dividing prepaid or accrued expenses such as taxes, rent, and interest fairly between buyer and seller as of the closing date.
Quitclaim deed: A deed conveying only whatever interest the grantor has, with no warranties; often used to clear a cloud on title.
Real Estate Guaranty Fund: A New Jersey fund (N.J.S.A. 45:15-34 et seq.) that reimburses people holding an unsatisfied final judgment against a licensee for embezzlement, conversion, or unlawful taking — up to $20,000 per transaction.
Real property: Land plus everything permanently attached to it (improvements and fixtures) and the bundle of legal rights of ownership.
Realty Transfer Fee: A fee paid by the grantor (seller) to the county recording officer when a deed is recorded, computed on the consideration recited in the deed at graduated rates (N.J.S.A. 46:15-7).
RESPA: The Real Estate Settlement Procedures Act — a federal law requiring loan-cost disclosures and prohibiting kickbacks at closing.
Section (survey): One square mile of land — 640 acres — and one thirty-sixth of a 6-mile-square township in the rectangular survey system.
Seller's agent: A licensee or firm that represents and owes full fiduciary duties to the seller in a transaction.
Sponsoring broker: The licensed New Jersey broker who employs or contracts with a salesperson and must certify the salesperson's application; a salesperson cannot operate independently of a broker.
Statute of frauds: The law requiring contracts for the sale of real estate (and most leases over a year) to be in writing to be enforceable.
Steering: Illegally guiding buyers toward or away from neighborhoods based on a protected class — a fair-housing violation.
Tenancy by the entirety: A form of co-ownership available to married couples and civil-union partners in New Jersey that carries the right of survivorship and protection from one spouse's individual creditors.
Tenancy in common: Co-ownership in which each owner holds an undivided, willable share; there is no right of survivorship.
TILA: The Truth in Lending Act — a federal law requiring lenders to disclose the cost of credit, including the annual percentage rate (APR).
Title insurance: A policy protecting the insured against loss from title defects that existed before the policy date, such as liens or recording errors.
Transaction broker: A licensee who works with a buyer and/or seller without representing either party; honest and competent to all, but not a fiduciary and not bound to keep their information confidential.
Trust (escrow) account: A separate account at an authorized New Jersey financial institution where a broker must promptly deposit funds of others, kept apart from the broker's own money (N.J.A.C. 11:5-5.1).

Free New Jersey Real Estate Exam Study Materials & Resources

Everything you need to prepare for the New Jersey real estate exam is free here — no paywall, no sign-up. This guide is the foundation; pair it with the rest of our free New Jersey study materials for active recall, timed practice, and last-minute review:

New Jersey Real Estate Practice Test — exam-style questions across the New Jersey and national content areas, with explanations.
New Jersey Real Estate Flashcards — active-recall decks for NJREC law, the CIS, attorney review, fiduciary duties, and math formulas.

New Jersey Real Estate Exam Study Guide FAQ

You generally need 70% to pass the New Jersey real estate salesperson exam, which is administered by PSI. The exam combines national/general real estate questions with a New Jersey state-specific portion on license law, agency, and disclosure. Confirm the current passing score and question count in the PSI candidate bulletin before you test.

References

1.New Jersey Real Estate Commission. “Division of Real Estate.” NJ DOBI (nj.gov/dobi). ↑
2.New Jersey Legislature. “N.J.S.A. Title 45, Chapter 15 — Real Estate License Act.” njleg.state.nj.us. ↑
3.New Jersey Real Estate Commission. “Real Estate License Information & N.J.A.C. 11:5 Rules.” nj.gov/dobi. ↑
4.PSI Services. “New Jersey Real Estate Candidate Information Bulletin.” PSI. ↑
5.New Jersey Department of Environmental Protection. “Private Well Testing Act Program.” NJDEP (dep.nj.gov). ↑
6.New Jersey Division on Civil Rights. “New Jersey Law Against Discrimination.” NJ Office of the Attorney General. ↑
7.U.S. Department of Housing and Urban Development. “Fair Housing Act Overview.” HUD. ↑
8.Consumer Financial Protection Bureau. “Real Estate Settlement Procedures Act (Regulation X).” CFPB. ↑
9.U.S. Environmental Protection Agency. “Real Estate Disclosure (Lead-Based Paint).” EPA. ↑
10.U.S. Geological Survey. “How is the Public Land Survey System organized?.” USGS. ↑

Sources for the concept answers

Every answer in the New Jersey real estate concept questions above is drawn from an authoritative primary source:

Internal Revenue Service. “Sales and Other Dispositions of Assets (Publication 544).” IRS.

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