Adi93 wrote:
Due to the recent boom in the housing market, home prices have risen to levels unattainable by a significant portion of the working public. There are currently no regulations in place that require real estate listings to include an asking price, and in a recent consumer interest survey, it was determined that homes listed with prices eventually sold for amounts substantially lower than homes that were listed without prices. Clearly, the listings with asking prices foster competition among one another that results in savings for the home buyer. Therefore, in order to facilitate home ownership, I propose new legislation requiring real estate listings to include a current asking price.
Which of the following if true seriously undermine the argument for new legislation?
A. The proposed regulation would most likely result in fewer home showings because potential buyers might restrict their visits to homes within their budgetary constraints.
B. Currently, homes listed with asking prices are generally appraised at lower values than homes listed without.
C. There have been several recently imposed regulations aimed at facilitating home ownership.
D. Often, determining factor in whether or not a listing includes an asking price is simply the real estate agent's preference.
E. The proposed legislation would impede the operation of a free market and ultimately cause more harm than good.
Home prices have increased. Many working people are unable to buy.
No regulations requiring asking price,
A survey determined that homes listed with prices eventually sold for amounts substantially lower than homes that were listed without prices.
Clearly, the listings with asking prices foster competition among one another that results in savings for the home buyer.
Conclusion: To facilitate home ownership, I propose new legislation requiring real estate listings to include a current asking price.
Here is what the argument is saying - Houses have become expensive. When asking price is listed, it led to competition among the houses with listed asking prices and hence the asking price reduced.
Say two houses are both listed at 500k. A buyer checks them both out. The owner A decides to go down to 490k. Owner B decides to go down to 480k and so on.
This competition does not take place when asking price is hidden.
So the argument says that listed asking price should become mandatory. That will facilitate home ownership because more people will be able to buy houses if price comes down.
We need to weaken it.
A. The proposed regulation would most likely result in fewer home showings because potential buyers might restrict their visits to homes within their budgetary constraints.
If prices are listed, people will check out fewer houses. Then the competition may not play out. Hence it may not facilitate home ownership. Weakens the conclusion.
B. Currently, homes listed with asking prices are generally appraised at lower values than homes listed without.
Homes with listed asking prices are appraised at a lower value currently (perhaps because they know that competition will pull down the pricing). Here is the point - we don't know how appraised value impacts actual transaction price. We also don't know how appraised value will change if all homes have listed asking prices. In option (A) we are given that people will check out fewer houses so we know what to expect and hence it weakens our argument. In this option, we don't know how appraised value and transaction value will change if the legislature is enacted.
C. There have been several recently imposed regulations aimed at facilitating home ownership.
Irrelevant.
D. Often, determining factor in whether or not a listing includes an asking price is simply the real estate agent's preference.
Irrelevant.
E. The proposed legislation would impede the operation of a free market and ultimately cause more harm than good.
More harm than good doesn't tell us how. Our aim is to facilitate home ownership. Will more people buy homes? If yes, then our aim is met even if it involves harm in some other ways.
Answer (A)
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