NJ Real Estate Course Unit 3 Review Questions

The legal relationship between a broker and seller is generally:

A. special agency

B. general agency

C. ostensible agency

D. universal agency

A. special agency

A seller cannot be present for the closing. Instead, her parent will sign for her having been given:

A. a power of attorney

B. assistance of general counsel

C. general counsel authority

D. universal authority

A. a power of attorney

The statement "a broker must be employed to recover a commission for his or her services" means

A. the broker must work in a real estate office

B. someone must have agreed to pay a commission to the broker for selling the property

C. the broker must have asked the seller the price of the property and then found a ready, willing, and able buyer

D. the broker must have a salesperson employed in the office

B. someone must have agreed to pay a commission to the broker for selling the property

The procuring cause of a sale is

A. always the person who first shows the property

B. always the licensee who draws up the contract

C. sometimes hard to determine

D. whomever the buyer wants to receive the commission

C. sometimes hard to determine

A listing may be terminated when either broker or principal

A. gets married

B. goes bankrupt

C. overfinances other property

D. becomes 21 years of age

B. goes bankrupt

When retained by the seller, the broker owes a prospective buyer

A. obedience to lawful instructions

B. confidentiality about the buyer's financial situation

C. honest treatment

D. first loyalty

C. honest treatment

The salesperson who sincerely tries to represent both buyer and seller is practicing

A. fraud

B. puffing

C. dual agency

D. general agcency

C. dual agency

A seller who wishes to cancel a listing agreement in New Jersey

A. must cite a legally acceptable reason

B. may not cancel without the agent's consent

C. may be held liable for money and time expended by the broker

D. may not sell the property for six months after.

C. may be held liable for money and time expended by the broker

In New Jersey, the buyer of residential property is entitled to find out about the presence of a convicted sex offender in the neighborhood

A. in the listing information for the property

B. at the time the contract is signed

C. after the sale of the property has closed

D. only if he or she can demonstrate a material need to know

C. after the sale of the property has closed

What are buyers who ask to see the owner's Comprehensive Loss Underwriting Exchange looking for?

A. Nearby hazardous waste dumping sites

B. Presence of a convicted sex offender

C. Possible suicide in the home

D. Insurance claims for the past five years

D. Insurance claims for the past five years

An example of a latent defect is a

A. large crack in the dining room ceiling

B. roof with warped shingles

C. used-car lot next door

D. malfunctioning septic system

D. malfunctioning septic system

An independent contractor may be paid

A. a regular draw against earnings

B. reimbursed car expenses

C. commission on sales

D. two week vacations each year

C. commission on sales

Commission usually are earned when

A. the buyer makes a purchase offer

B. the seller accepts the buyer's offer without conditions

C. a new mortgage has been promised by the lender

D. title to the property transfers.

B. the seller accepts the buyer's offer without conditions

Even if a proposed transaction does not go through, the broker sometimes may collect a commission where the

A. buyer turned out to be financially unable

B. seller refused to do repair required by the lender

C. seller simply backed out

D. lender did not appraise the house for the sales price.

C. seller simply backed out

A salesperson's commission on a real estate transaction is

A. paid within ten days after the broker is paid for the transaction

B. paid at the rate set by New Jersey Real Estate Commission

C. always paid in cash

D. generally determined, by custom, by the broker with no input from the slaesperson

A. paid within ten days after the broker is paid for the transaction

To be entitled to collect a commission on a real estate transaction, an agent must

A. be the procuring cause of the transaction

B. charge no more than the local " going rate" of commission

C. work a minimum number of hours

D. sign the sales contract as a witness

A. be the procuring cause of the transaction

The seller lists his house with a broker offering a bonus commission of $500 to the agent who brings a good buyer before Thanksgiving. An agent with a cooperating firm effects the sale on November 1. The buyer agent may collect that bonus from.

A. the seller

B. the listing broker

C. the selling broker

D. no one

C. the selling broker

Commission rates are set by?

A. state law

B. local custom

C. the broker

D. agreement between seller and broker

D. agreement between seller and broker

At a booth in the neighborhood coffee shop, a broker is seated with her friendly rival. Her rival says," Did you hear about that firm that's charging a flat fee for selling property? Do you think they will make it ?" The broker's proper response is to

A. explain to her rival that flat fees are allowed by law, just as commission are

B. assure her rival that she will not be charging her commission rates

C. caution the rival about the dangers of discussing comping firms

D. point out to the rival that it is a violation of federal antitrust law for competing brokers to discuss any spect of commission rates

D. point out to the rival that it is a violation of federal antitrust law for competing brokers to discuss any spect of commission rates

The transaction broker represents

A. the seller

B. the buyer

C. the lending institution

D. no one

D. no one

A Consumer Information Statement (CIS) is required of transactions involving

A. commercial property and vacant land

B. one to four family dwellings

C. farms and subdivisions

D, all real estate

B. one to four family dwellings

A dual agent cannot provide advice on

A. available financing.

B. the right price to accept.

C. utility costs.

D. hidden defects.

B. the right price to accept.

The seller may remain quiet about

A. sagging floor joists

B. seasonal flooding

C. the previous owner's suicide

D. inadequate septic tank

C. the previous owner's suicide

The duty of loyalty forbids the seller's broker to

A. mention the condition of the house in ads

B. place a sign on the property

C. suggest an offer under the listed price

D. give information over the telephone

C. suggest an offer under the listed price

When the buyer gives a seller's broker information about possible financial problems in completing the purchase the broker should

A. respect the confidence and let it go no further

B. inform the seller immediately

C. offer to lend the buyer extra funds needed

D. ask for a written confirmation of the situation

B. inform the seller immediately

If the agent in the previous question is acting as a buyer's broker, the most correct response for the broker is to

A. say nothing to the seller because of the duty of confidentiality to the principal

B. explain to the buyer that not revealing the problem to the seller may constitute concealment of a material defect

C. tell the seller, at the same time asking the seller not to reveal to the buyer that confidentiality was breached

D. try to find another buyer for the property

B. explain to the buyer that not revealing the problem to the seller may constitute concealment of a material defect

Negligent misrepresentation occurs when

A. the speaker knows the statement is false

B. the speaker should know the statement is false

C. the speaker is not expected to have knowledge in the matter under discussion

D. no harm is done by the falsehood

B. the speaker should know the statement is false

The term REALTOR applies only to

A. any licensed broker

B. any broker or salesperson

C. members of a private organization

D. graduates of the REALTOR Institute

C. members of a private organization

New Jersey's Consumer Fraud Act

A. does not apply to real estate

B. holds licensees liable for any misrepresentation

C. allows exemption from liability in some circumstances

D. doesn't cover omission of material facts

C. allows exemption from liability in some circumstances