PSI New Jersey Real Estate State Practice Exam

What is the Realty Transfer Fee (RTF) in New Jersey?

1. A fee for property inspections

2. A fee paid when title to a parcel of real estate passes

3. A fee for recording the deed

4. A fee charged for closing costs

The correct answer is: A fee paid when title to a parcel of real estate passes

The Realty Transfer Fee (RTF) in New Jersey is a fee that is specifically assessed when the title to a parcel of real estate passes from one party to another. This fee is calculated based on the sale price of the property and is paid by the seller at the time of closing. The purpose of the Realty Transfer Fee is to generate revenue for the state and local municipalities, and it reflects the principle that a transfer of property ownership involves a financial obligation to the government. The fee is not related to property inspections, the recording of the deed, or general closing costs, even though those can also be part of the real estate transaction process. Inspections are typically separate expenses that the buyer may incur to evaluate the property, and the recording of the deed is a separate process with its associated fees. Closing costs cover a variety of fees incurred at the closing of the transaction but do not include the RTF specifically. Understanding this fee is essential for sellers and real estate professionals when navigating property transactions in New Jersey.