PSI New Jersey Real Estate State Practice Exam

Which of the following actions is NOT prohibited by New Jersey Real Estate Commission rules?

1. Firing a new salesperson for poor performance

2. Misrepresenting property values

3. Failing to disclose commission rates

4. Accepting undisclosed referral fees

The correct answer is: Firing a new salesperson for poor performance

In the context of New Jersey Real Estate Commission rules, the action of firing a new salesperson for poor performance is not prohibited. Real estate brokerage firms have the right to evaluate the performance of their salespeople and decide how to manage their staff, including the decision to terminate employment when necessary. This action aligns with standard business practices where employers maintain the authority to make staffing decisions based on performance metrics. On the other hand, the other options involve unethical practices that are prohibited and undermine the integrity of real estate transactions. Misrepresenting property values can lead to significant legal consequences due to deception in the marketplace. Failing to disclose commission rates violates transparency regulations meant to protect consumers. Lastly, accepting undisclosed referral fees raises ethical concerns regarding conflicts of interest and transparency. These actions can lead to disciplinary action against a real estate professional, emphasizing the importance of adherence to ethical standards in the industry.