NJ RE Broker flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

New Jersey Real Estate Commission

State agency within the Division of Consumer Affairs that licenses and regulates New Jersey real estate brokers, broker-salespersons, salespersons, and referral agents under the Real Estate License Act.

Referral agent license

A New Jersey license that permits only referring prospective clients to a brokerage for compensation paid through the sponsoring broker; referral agents may not list, show, or negotiate.

Continuing education requirement

New Jersey licensees must complete 12 approved continuing education hours during each two-year license term, including required core topics, to renew an active license.

Branch office license

A separate license required for each additional location where a New Jersey brokerage conducts business; each branch must be supervised by a licensed broker or broker-salesperson.

Broker of record

The licensed New Jersey broker responsible for supervising all office activity, affiliated licensees, escrow handling, advertising, and transaction record retention at a brokerage office.

Independent contractor agreement

A written agreement under which a New Jersey salesperson is paid by commission as an independent contractor while remaining subject to the supervising broker's control under license law.

Broker escrow account

A separate trust account at a New Jersey bank into which a broker deposits client funds such as earnest money and security deposits; the funds may not be commingled with business funds.

Commingling

Mixing client trust funds with a broker's personal or operating money, or failing to keep escrow funds in a separate identifiable account, which violates New Jersey license law.

Trust account reconciliation

A monthly comparison of the escrow checkbook, bank statement, and individual transaction ledgers to confirm that client funds on deposit equal the total owed to clients.

Dual agency

A New Jersey brokerage relationship in which one broker represents both buyer and seller in the same transaction; it requires the informed written consent of both parties.

Transaction broker

A New Jersey brokerage relationship in which the licensee assists both parties without representing either, owing honesty and accounting but no fiduciary loyalty to either side.

Fiduciary duties

A broker's duties to a client, including loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care, which exceed the duties owed to a customer.

Consumer Information Statement

A New Jersey disclosure explaining seller agency, buyer agency, dual agency, and transaction brokerage; it must be given at the first substantive contact and acknowledged by the consumer.

First substantive contact

The point when a New Jersey licensee begins discussing a consumer's specific real estate needs, triggering delivery of the Consumer Information Statement.

Seller's property condition disclosure

A written statement in which a New Jersey seller discloses known defects and material facts about the property to a prospective buyer before the transaction is completed.

Attorney review period

A three-business-day period after both parties sign the standard New Jersey real estate contract during which either party's attorney may disapprove or modify the contract.

Exclusive right to sell listing

A New Jersey listing agreement that entitles the broker to a commission regardless of who procures the buyer, including when the owner sells the property.

Statute of Frauds

A legal rule requiring real estate sale contracts and certain leases to be in writing and signed by the party to be charged before they are enforceable.

Loan-to-value ratio

The mortgage loan amount divided by the lesser of the property's appraised value or purchase price, expressed as a percentage and used to set down payment requirements.

Private mortgage insurance

Insurance usually required on conventional loans above 80 percent loan-to-value; federal law requires cancellation when the balance reaches 78 percent of original value.

NJHMFA

The New Jersey Housing and Mortgage Finance Agency, which offers below-market first-time homebuyer mortgages and down payment assistance subject to income and purchase price limits.

Sales comparison approach

An appraisal method that estimates value by adjusting the prices of recently sold comparable properties for differences in size, condition, location, and features.

Highest and best use

The reasonably probable, legally permissible, physically possible, financially feasible use of a property that produces the greatest value.

Security deposit limit

Under New Jersey law, a landlord may not require more than one and one-half months' rent as a security deposit for residential premises.

Security deposit return

A New Jersey landlord must return a residential security deposit with an itemized statement of deductions within 30 days after the tenant vacates the unit.

Fair Housing Act classes

Federal law prohibits housing discrimination based on race, color, religion, sex, national origin, familial status, or disability; New Jersey law adds additional protected classes.

NJ Law Against Discrimination

A New Jersey civil rights law covering housing that adds protected classes such as source of income, sexual orientation, gender identity, marital status, ancestry, and age.

Commission formula

Total commission equals the sale price multiplied by the agreed commission rate; for example, five percent of a $400,000 sale is $20,000.

Proration formula

To prorate an annual expense, divide the yearly amount by 365 and multiply by the number of days the buyer or seller owns the property.

Acre conversion

One acre equals 43,560 square feet; to convert a rectangular lot to acres, multiply length by width and divide the result by 43,560.

Realty Transfer Fee

A New Jersey fee based on the property's consideration, generally paid by the seller at closing, with an additional one percent tax on residential sales of one million dollars or more.

Closing Disclosure

A federal form itemizing final loan terms and closing costs that must be delivered to the borrower at least three business days before loan consummation.