A broker-in-charge believes that providing a handbook of company policies constitutes adequate training, as every associated licensee has had the required prelicense education, and all are operating as independent contractors. An associated licensee commits a fraud, but claims to not understand the situation due to lack of training, and blames the broker-in-charge. The broker-in-charge argues that it was the associate's responsibility to ask for the broker's help if the associate was unsure about correct procedure. In this case, the

agent and the broker are both subject to discipline.

broker alone is subject to discipline for failing to train the company's agents.

broker will avoid disciplinary action, as training of independent contractors is not required

associate alone is subject to discipline, as the fraud was a result of the associate's failure to seek counsel.

As required by the New Jersey Real Estate Sales Full Disclosure Act, before signing any contract for the purchase or lease of a property registered with the New Jersey Real Estate Commission, the purchaser or lessee MUST be provided with a copy of the:

New Jersey Public Offering Statement approved by the Commission

Statement of Record held by the developer with the Commission

New Jersey Public Offering Statement approved by the Commission

deed or other instrument establishing title in the name of the developer

filed plat map identifying the location of the property being bought or leased

According to the Real Estate Licensing Law, a real estate licensee can provide a rebate of the commission to a buyer

if a writing confirming the terms of the rebate is provided to the buyer at closing.

if notated on the contract of sale.

provided it does not exceed 50% of the total commission.

if a writing confirming the terms of the rebate is provided to the buyer at closing.

Real Estate Exam Prep New Jersey

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Question 1

A property sold for $160,000. The loan-to-value ratio was 80% and there were 2 discount points charged. Which of the following was the cost of the discount points?

Your Answer: Option(s)

Correct Answer: Option(s) C

Rationale

The cost of the discount points was $2,400.

To calculate the cost of the discount points, we first determine the amount of the loan by multiplying the property value of $160,000 by the loan-to-value ratio of 80%. This results in a loan amount of $128,000. Since there are 2 discount points charged, each point being 1% of the loan amount, the total cost of the discount points is $2,400.

A) 600
This amount represents 0.5% of the loan amount ($128,000), which is not equivalent to the cost of 2 discount points. The calculation for discount points must reflect 2% of the loan amount, making this choice incorrect.

B) 1,500
This value corresponds to approximately 1.17% of the loan amount ($128,000). Since the cost of discount points is based on 2% of the loan amount, this option does not accurately reflect the total cost for 2 points, rendering it incorrect.

C) 2,400
This choice correctly calculates the cost of the 2 discount points at 1% each of the loan amount of $128,000. Therefore, 2 points equate to $2,400, making this the accurate answer.

D) 3,000
This amount represents approximately 2.34% of the loan amount ($128,000), which exceeds the total cost of the 2 discount points. Since the calculation is based on 2% of the loan amount, this value is incorrect.

Conclusion
The total cost of the discount points for a property valued at $160,000 with an 80% loan-to-value ratio is derived from calculating 2% of the loan amount of $128,000, resulting in $2,400. The other options fail to correctly represent the cost of the discount points based on the given loan amount and percentage. Thus, understanding the loan-to-value ratio and the nature of discount points is crucial for accurate mortgage calculations.

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The cost of the discount points was $2,400.

Acceptance is the essential element missing to form a valid contract.

agent and the broker are both subject to discipline.

New Jersey Public Offering Statement approved by the Commission.

A real estate licensee can provide a rebate of the commission to a buyer if a writing confirming the terms of the rebate is provided to the buyer at closing.

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The cost of the discount points was $2,400.

Acceptance is the essential element missing to form a valid contract.

agent and the broker are both subject to discipline.

New Jersey Public Offering Statement approved by the Commission.

A real estate licensee can provide a rebate of the commission to a buyer if a writing confirming the terms of the rebate is provided to the buyer at closing.

Free Preview Ended

Unlock Full Access

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