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Updated on: 30 Oct 2025, 07:02
Originally posted by soaringAlone on 20 Jan 2013, 17:48.
Last edited by Bunuel on 30 Oct 2025, 07:02, edited 9 times in total.
Last edited by Bunuel on 30 Oct 2025, 07:02, edited 9 times in total.
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Message sent from a real estate agent to his clients
10:15 AM - Good news! We have received an offer on your home. The offer is for $300,000. While I know this is quite a bit lower than your asking price, it is common for buyers to make an aggressively low bid to try to bring down the seller's price. Based on my experience, I expect that you can counter at a price of $345,000, and still end up agreeing on a price that is no lower than 10% below your asking price. Just let me know what you would like to do!
10:15 AM - Good news! We have received an offer on your home. The offer is for $300,000. While I know this is quite a bit lower than your asking price, it is common for buyers to make an aggressively low bid to try to bring down the seller's price. Based on my experience, I expect that you can counter at a price of $345,000, and still end up agreeing on a price that is no lower than 10% below your asking price. Just let me know what you would like to do!
The home sellers' asking price for their home is at least $380,000.: No
For the buyers, the ability to complete the purchase before mid-August is more important than the final price of the home.: No
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
57% (02:46) correct
43%
(03:02)
wrong
based on 615
sessions
History
Date
Time
Result
Not Attempted Yet
1. Consider each of the following statements. Does the information in the three articles support the inference as stated?
| Yes | No | |
| The home sellers' asking price for their home is at least $380,000. | ||
| For the buyers, the ability to complete the purchase before mid-August is more important than the final price of the home. |
ShowHide Answer
Official Answer
The home sellers' asking price for their home is at least $380,000.: No
For the buyers, the ability to complete the purchase before mid-August is more important than the final price of the home.: No
It is possible for the buyers and sellers to make a deal in which neither side needs to change its opening offer by more than 15%.: Yes
The sellers' real estate agent is more likely to accept a lower final price of the home than are the sellers themselves.: No
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
41% (01:34) correct
59%
(01:36)
wrong
based on 574
sessions
History
Date
Time
Result
Not Attempted Yet
2. Consider each of the following statements. Does the information in the three articles support the inference as stated?
| Yes | No | |
| It is possible for the buyers and sellers to make a deal in which neither side needs to change its opening offer by more than 15%. | ||
| The sellers' real estate agent is more likely to accept a lower final price of the home than are the sellers themselves. |
ShowHide Answer
Official Answer
It is possible for the buyers and sellers to make a deal in which neither side needs to change its opening offer by more than 15%.: Yes
The sellers' real estate agent is more likely to accept a lower final price of the home than are the sellers themselves.: No
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20 Feb 2013, 14:30
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soaringAlone
Hi soaringAlone, to elaborate on what Siddarth86 mentioned above, remember that the IR is part of the GMAT, which means that the same standards you'd have on any CR question must be upheld. In this case, we're looking for a "must be true" logical standard, and all we have is a "yeah could easily be true" inference from the text. If the sellers had written back saying "340K is the lowest we'll go", then you could infer the price points of both parties.
Furthermore, this question plays on people's preconceived notions. Most people believe that their real estate agents are willing to sell their houses for less than they're worth in order to maximize turnover. Most sellers would surmise that real estate agents would rather flip a house in one week for a reasonable price than put in 3 months work for an extra 2-5% on the selling price. This preconceived notion can lead to an erroneous answer choice on test day.
Whenever a GMAT question seems to be preying on your preconceived notions, you need to double check that the statements are supported 100% by the text and not being helped along by your own beliefs. In this case, it's entirely possible that the real estate agent wants to hold out for more than the buyers would, so the answer must be false as we're not completely sure either way.
29 Oct 2023, 02:17
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OFFICIAL EXPLANATION
1.1 No. While it is true that $345,000 is 10% lower than approximately $383,000, it is unknown whether the "end up agreeing upon" price that the real estate agent suggests will happen is going to be that $345,000. It is more likely, from the rest of the emails, that the $345,000 counteroffer will settle at a price at least substantially lower than that, making the final price equal to more than 10% less than $380,000. Accordingly, we cannot determine whether the asking price is greater than or less than $380,000.
1.2 No. While the third email suggests that a mid-August closing date is important to the buyers, it does not necessarily indicate that such a closing date is more important than price. In fact, that very same email includes a firm rebuke of the $350,000 price point, suggesting that the final price of the home is a primary concern of the buyers.
2.1 Yes. The buyers have initially offered $300,000, so a 15% compromise for them would be $345,000. And the sellers' agent has noted that, at $345,000, the sellers would receive a price that at maximum would reflect a 10% reduction from their opening price. This puts the maximum offer price at $383,000, a price for which 15% off would be less than $326,000. Accordingly, any price between $326,000 and $345,000 would allow both buyer and seller to achieve a price within 15% of their initial offers. Strategically, note that, as $345,000 represents at worst 10% off for the sellers and also represents the full 15% compromise for the buyers, you can answer this without performing any further calculations. A 10% compromise by the sellers and a 15% compromise by the buyers satisfies the statement in this question, so we know that the possibility is true.
2.2 No. While the sellers' real estate agent seems more willing to drop prices in negotiation, it is not necessarily true that he will accept a lower price in the end. Email #2 mentions that the sellers are willing to counteroffer at $350,000 in part because that higher price gives them "room to negotiate" underneath, so we do know that the sellers are willing to accept a price lower than $350,000. And the real estate agent explains in Email # 3 that he feels that a settling price of $330,000 is possible. Because we do not know whether this price is considered too low by the sellers, we cannot determine whether either party's
intent is to sell for lower than the other is willing to accept, and this statement is not necessarily
supported by the given information.
