Agency on the NJ Real Estate Exam: Concepts That Show Up Most
The short answer: Agency is 13% of the general (national) content outline on New Jersey's PSI salesperson exam. It covers how agency relationships are created and ended, listing and buyer-brokerage agreements, fiduciary duties to clients, duties to customers, and disclosure (PSI candidate bulletin). Agency also appears in the NJ-specific portion under "Agency/Conflicts of Interest/Disclosure Requirements." There, New Jersey's Consumer Information Statement rule, N.J.A.C. 11:5-6.9, is the core: it sets when you must explain the business relationships, and since P.L.2024, c.32 took effect on August 1, 2024 there are five: seller's agent, buyer's agent, disclosed dual agent, designated agent and transaction broker (N.J.A.C. 11:5-6.9; NJREC Bulletin 24-11).
This guide walks through the agency concepts in the outline, with the NJ rules attached. For the full exam format, see our NJ real estate exam (PSI) guide.
What does the PSI outline say about agency?
Section VI of the general outline, "Agency" (Sales 13%), lists (PSI candidate bulletin):
- A. Agency and non-agency relationships: how agency relationships are established; types of listing contracts; buyer brokerage and tenant representation contracts; other brokerage relationships, including transaction brokers and facilitators; powers of attorney and other assignments of authority; and conditions for terminating agency or brokerage service agreements
- B. Agent duties: fiduciary duties of agents; duties to customers and non-clients, including honesty and good faith
- C. Agency disclosures: disclosure of agency or representation; disclosure of possible conflicts of interest or self-interest
On the NJ side, "Statutes and Rules Governing Licensee Activities" (22 salesperson items) includes "Agency/Conflicts of Interest/Disclosure Requirements" as one of 13 listed topics. The bulletin doesn't say how many of those 22 items are about agency.
Client or customer: who do you represent?
Most agency questions turn on one distinction. A client (the principal) is the party you represent. A customer is a party you work with but don't represent. NJ's rules put it this way: a licensee acting as an agent must protect and promote the client's interests as their own, but that "does not relieve the licensee from the obligation of dealing fairly with all parties to the transaction" (N.J.A.C. 11:5-6.4(a)).
So when a question asks what you owe the other side, the answer is honesty and fair dealing, not loyalty or confidentiality.
What are the five NJ business relationships?
P.L.2024, c.32 codifies them, and the revised CIS that NJREC requires licensees to use in place of the text printed in N.J.A.C. 11:5-6.9(h) describes them (NJREC Bulletin 24-11):
| Relationship | Who it represents | Key point |
|---|---|---|
| Seller's agent (or subagent) | Seller only | Material information from the buyer is told to the seller. Other firms can act as subagents of the listing firm |
| Buyer's agent | Buyer only | Material information from the seller is told to the buyer. In a residential deal, a written brokerage services agreement is required |
| Disclosed dual agent | Both parties | Needs informed written consent from both. Can't reveal, without express permission, that the seller will take less or the buyer will pay more |
| Designated agent | One party (buyer or seller) | The firm names separate licensees for each side with both parties' informed written consent. The firm itself remains a disclosed dual agent |
| Transaction broker | Neither party | No agency relationship. Must be honest and competent, but doesn't have to keep information confidential |
Two points to remember. New Jersey law doesn't require licensees to act as agents when providing brokerage services, which is why the transaction broker option exists (revised CIS). And dual or designated agency needs more than handing over the Statement: in a residential deal, the party's written consent must be in the brokerage services agreement or in another document they separately initial or sign (P.L.2024, c.32, s.3, s.5; NJREC Bulletin 24-11). Acting for more than one party without everyone's knowledge is also grounds for discipline under N.J.S.A. 45:15-17(b).
What fiduciary duties does an agent owe?
The NJ Consumer Information Statement lists the fiduciary duties a seller's or buyer's agent owes the client as reasonable care, undivided loyalty, confidentiality, full disclosure and the duty to account (revised CIS). Expect scenario questions that test where those duties stop. Under disclosed dual agency, for example, the firm can't share either party's confidential information, such as the highest price a buyer can pay or the lowest price a seller will accept, without express permission.
What must you disclose to everyone?
Even to a non-client, an agent may not misrepresent material facts (the buyer's financial ability to pay is the example the rule gives) and must disclose material physical defects that a reasonable inspection by the licensee would reveal (N.J.A.C. 11:5-6.9(h)). NJ's conduct rule adds three points (N.J.A.C. 11:5-6.4):
- A "reasonable effort" to find material information includes, at minimum, asking the seller or seller's agent about physical conditions and visually inspecting the property.
- Licensees must disclose actual or potential conflicts of interest they can reasonably anticipate.
- Social conditions (such as noisy neighbors) and psychological impairments (such as a murder or suicide on the property, or a claim that it's haunted) aren't physical-condition information. If a buyer or tenant asks, though, the licensee must share what they know, subject to the rule's exceptions.
When must you give the Consumer Information Statement?
For 1–4 unit residential sales, vacant one-family lots, and most residential leases, N.J.A.C. 11:5-6.9(d)–(e) sets the timing:
- Verbally describe the business relationships before the first discussion of a buyer's motivation or financial ability to buy, or a seller's motivation or desired price.
- If that first discussion happens in a business meeting, deliver the written Statement before the discussion. If it happens by phone or in a social setting, deliver it at the next meeting, or include it with any material sent before then.
- At the latest, buyers get it by the first showing (or the initial offer if there's no showing).
- If you plan a buyer-brokerage or listing agreement, deliver it no later than the start of that agreement presentation.
- Under P.L.2024, c.32, the Statement must also be part of the brokerage services agreement and delivered no later than when the party signs it. A party with no brokerage gets it before signing an offer, or as soon as reasonably practical after (NJREC Bulletin 24-11).
Licensee-prepared offers and contracts must also include a declaration of the firm's business relationship (N.J.A.C. 11:5-6.9(j)).
Which NJ conflict-of-interest rules come up?
From N.J.S.A. 45:15-17:
- Selling property you have an interest in: disclose your interest and licensee status to the buyer in the contract (subsection p).
- Buying property: disclose your licensee status to the seller in the contract (subsection q).
- Listings: give the client a fully executed copy and include a definite termination date (subsection f). That ties into the outline's "termination of agency" topic.
How should you study agency?
- Learn the five relationships as a comparison table, and practice saying who each one represents and what information flows where.
- For every scenario, ask: Who is my client, and what do I owe the other party?
- Memorize the Consumer Information Statement timing triggers (motivation, price and financial ability).
- Read the Statement text itself: the revised CIS issued with Bulletin 24-11, which licensees use in place of the text in N.J.A.C. 11:5-6.9(h). It's short, and it's the source.
Our guide to agent vs. REALTOR® vs. broker explains the license titles behind the word "agent." Real estate math on the NJ exam covers another heavily tested section, and the attorney review guide covers the contract rule that often appears with agency scenarios. For timed practice, Business Elementary offers practice exams and the 75-hour pre-licensing course.
Sources
- PSI, NJ Candidate Information Bulletin (updated 2/1/2026), content outline section VI and NJ "Statutes and Rules": https://test-takers.psiexams.com/api/content/bulletin/1667
- N.J.A.C. 11:5-6.9, Consumer Information Statement (via Cornell LII): https://www.law.cornell.edu/regulations/new-jersey/N-J-A-C-11-5-6-9
- N.J.A.C. 11:5-6.4, Obligations of licensees to public and to each other (via Cornell LII): https://www.law.cornell.edu/regulations/new-jersey/N-J-A-C-11-5-6-4
- N.J.S.A. 45:15-17, Investigation of licensees; grounds for sanctions (via Justia): https://law.justia.com/codes/new-jersey/title-45/section-45-15-17/
- P.L.2024, c.32 (effective August 1, 2024), NJ Legislature: https://pub.njleg.state.nj.us/Bills/2024/PL24/32_.HTM
- NJ Dept. of Banking and Insurance, Bulletin No. 24-11 (Aug. 1, 2024): https://www.nj.gov/dobi/bulletins/blt24_11.pdf
- NJREC, revised Consumer Information Statement (Bulletin 24-11, Appendix A): https://www.nj.gov/dobi/bulletins/blt24_11Info.pdf
Last reviewed: October 28, 2026
Related guides:
- Want the practical side of dual agency? Disclosed Dual Agency in NJ: Informed Consent and Its Limits explains the consent paperwork and what a dual agent can't share.
Frequently Asked Questions
How much of the NJ real estate exam is about agency?
Agency is 13% of the general content outline for salespersons. It's also a listed topic in the NJ "Statutes and Rules" section (PSI bulletin).
What are the five business relationships in New Jersey?
Seller's agent, buyer's agent, disclosed dual agent, designated agent and transaction broker. Designated agency was added by P.L.2024, c.32, effective August 1, 2024 (NJREC Bulletin 24-11).
What fiduciary duties does a NJ agent owe a client?
Reasonable care, undivided loyalty, confidentiality, full disclosure and the duty to account, as listed in the Consumer Information Statement (revised CIS).
Is dual agency legal in New Jersey?
Yes, as disclosed dual agency, but only with the informed consent of both parties. In a residential deal, that consent must be in the brokerage services agreement or another document the party separately initials or signs (P.L.2024, c.32; NJREC Bulletin 24-11).
Does a transaction broker represent anyone?
No. A transaction broker has no agency relationship with either party and doesn't have to keep information confidential (NJREC Bulletin 24-11; revised CIS).
Do NJ agents have to disclose a murder or suicide in a house?
It isn't treated as physical-condition information that must be disclosed. If a buyer or tenant asks, though, the licensee must share what they know, subject to the rule's exceptions (N.J.A.C. 11:5-6.4(d)).