Earning your New Jersey real estate license is an exciting and rewarding step toward a fulfilling career, but first, you need to pass the NJ Real Estate Exam. At Garden State Real Estate Academy, the state’s top-ranked real estate school, we understand that while the exam covers a wide range of topics, success doesn’t have to feel overwhelming. With our expert guidance, we’ll help you navigate the exam by focusing on the subjects that make up the majority of the test questions.
In this blog, we’ll explain how narrowing your study focus to six key topics can significantly enhance your chances of passing the NJ Real Estate Exam on your first attempt. While the exam covers 15 subject areas across its 110 questions, 83% of those questions will come from just six topics. By honing in on these critical areas, you can better prepare and increase your likelihood of success.
Key Focus Areas for Passing the NJ Real Estate Exam
The New Jersey Real Estate Exam consists of multiple-choice questions, with 83% focused on six main topics:
- Statutes and Rules Governing Licensee Activities (20%)
- Contracts (17%)
- Practice of Real Estate (13%)
- General Principles of Agency (13%)
- Real Estate Calculations (10%)
- Financing (10%)
The top-ranked Garden State Real Estate Academy suggests you dive into each of these topics. In this blog, we’ll explain what they cover, and how you can best prepare.
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Statutes and Rules Governing Licensee Activities (20% of the Exam)
Statutes and rules governing licensee activities make up the largest portion of the NJ Real Estate Exam—20% of the questions! To prepare for this topic, focus on understanding the specific laws and regulations that guide real estate professionals in New Jersey.
This section covers a wide range of key responsibilities, including:
- Advertising: Truthful advertising, fair housing regulations, and disclosure requirements.
- Broker-Salesperson Relationships: The duties, rights, and commissions that define broker-salesperson contracts.
- Agency and Conflict of Interest: Disclosure obligations and maintaining ethical standards in client relationships.
- Trust Fund Requirements: Managing escrow accounts properly and adhering to New Jersey’s stringent accounting standards.
Other critical elements include understanding contracts, commissions, place of business regulations, and specific laws like the Pinelands Protection Act of 1979 and the Mount Laurel Doctrine. Focus heavily on New Jersey-specific regulations and rules, as these details will be crucial for passing this section.
- Contracts (17% of the Exam)
Contracts are fundamental to the real estate profession, so it’s no surprise that 17% of the NJ Real Estate Exam is dedicated to this topic. The test will assess your knowledge of contract law and how it applies to real estate transactions.
Key concepts to study include:
- Requirements for Valid Contracts: What makes a contract enforceable? Understand the necessary components like mutual consent, offer and acceptance, and lawful purpose.
- Void vs. Voidable Contracts: Learn the difference between contracts that are void (completely unenforceable) and voidable (potentially unenforceable by one party).
- Bilateral vs. Unilateral Contracts: Understand how option agreements differ from traditional bilateral contracts.
- Breach of Contract: Study remedies available when a breach occurs, including specific performance and liquidated damages.
Real estate transactions depend on clear and legally binding contracts, so mastering this subject is essential.
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Practice of Real Estate (13% of the Exam)
This section of the exam tests your understanding of the day-to-day operations of a real estate agent. 13% of the questions will cover topics such as:
- Trust/Escrow Accounts: Proper handling and responsibility for trust funds, including the prevention of commingling and conversion.
- Federal Fair Housing Laws: Study protected classes and prohibited practices like redlining, blockbusting, and steering.
- Antitrust Laws: Understand how antitrust laws apply to real estate practices and how to avoid violations.
You’ll also need to be familiar with advertising laws, the use of technology in real estate, and the role of independent contractors vs. employees in a brokerage.
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General Principles of Agency (13% of the Exam)
Agency relationships are a cornerstone of real estate, and 13% of the exam is dedicated to this subject. To succeed in this section, focus on understanding the different types of agency relationships and your responsibilities as an agent. Key topics include:
- Types of Agents and Agencies: Study the difference between exclusive agents, non-agents, and transactional brokers.
- Agent’s Duties to Clients: This includes fiduciary duties like care, obedience, accountability, loyalty, and disclosure (COALD).
- Disclosure Requirements: Understand when and how to disclose agency relationships and conflicts of interest.
- Termination of Agency: Learn how agency relationships can end, whether through mutual agreement, expiration, or the destruction of the property.
Knowing your duties as an agent to both clients and customers is critical to passing this portion of the exam.
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Real Estate Calculations (10% of the Exam)
The math portion of the NJ Real Estate Exam makes up 10% of the questions. While it might seem daunting, real estate calculations are relatively straightforward once you understand the formulas.
Focus your preparation on:
- Property Tax Calculations: Learn how to calculate property taxes based on assessed values and tax rates.
- Commission and Commission Splits: Understand how to calculate commission based on the sale price of a property and split percentages with co-brokers or agents.
- Loan-to-Value Ratios (LTV): Be prepared to calculate the LTV ratio for loan applications.
Other common calculations include prorations, buyer funds needed at closing, and seller proceeds of sale.
- Financing (10% of the Exam)
Financing makes up another 10% of the NJ Real Estate Exam, covering a range of topics from basic loan concepts to complex mortgage types.
Key topics include:
- Types of Loans: Study conventional loans, FHA loans, VA loans, and USDA loans, along with terms like PMI (private mortgage insurance) and LTV (loan-to-value ratio).
- The Lending Process: Understand the steps involved in securing a mortgage, from pre-approval to closing.
- Credit and Lending Laws: Learn about federal lending regulations, including the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA).
Understanding these concepts will not only help you pass the exam but will also set you up for success when helping clients navigate the financing process.
Tips for Success
You have graduated from real estate school! Your brain hurts with all the information you learned in our real estate classes! Now that you know which areas to focus on, here are some additional tips to help you pass the NJ Real Estate Exam:
- Take Practice Tests: Familiarize yourself with the exam format by taking multiple practice exams.
- Review Course Material Regularly: Don’t wait until the last minute to study. Review key concepts throughout your course at Garden State Real Estate Academy.
- Create Study Groups: Connect with your classmates to quiz each other and discuss challenging topics.
- Use Flashcards: Flashcards are a great way to drill important terms and definitions.
- Stay Calm and Focused: On exam day, stay calm and read each question carefully. Don’t rush!
- Read each question three times before jumping into an answer.
Why Choose Garden State Real Estate Academy?
At Garden State Real Estate Academy, we understand what it takes to pass the NJ Real Estate Exam on the first try. As New Jersey’s top-ranked real estate school with over 650 five-star Google reviews, we offer expert instructors, flexible course options (including Zoom, in-classroom, and self-paced learning), and comprehensive study materials that will set you up for success.
Ready to start your real estate career? Enroll today at www.GSREA.com and let us help you pass the NJ Real Estate Exam with confidence! Questions? Call us at 609.923.0590
Good Luck on your state real estate exam!
