Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.
Customized for You
we will pick new questions that match your level based on your Timer History
Track Your Progress
every week, we’ll send you an estimated GMAT score based on your performance
Practice Pays
we will pick new questions that match your level based on your Timer History
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Thank you for using the timer!
We noticed you are actually not timing your practice. Click the START button first next time you use the timer.
There are many benefits to timing your practice, including:
The Competition Continues - Game of Timers is a team-based competition based on solving GMAT questions to win epic prizes! Starting July 1st, compete to win prep materials while studying for GMAT! Registration is Open! Ends July 26th
In some countries, real estate agents negotiating with prospective
[#permalink]
Show Tags
23 Mar 2012, 00:58
1
10
00:00
A
B
C
D
E
Difficulty:
55% (hard)
Question Stats:
67% (02:33) correct 33% (02:38) wrong based on 435 sessions
HideShow timer Statistics
In some countries, real estate agents negotiating with prospective clients who want to sell their houses all recommend initial asking prices that are as high as the current market permits. They do this because potential sellers are more likely to entrust their houses to the agent who values them highest. In a housing market with falling demand, the predictable result is a sharper drop in the number of houses sold than the drop in demand alone would account for.
Which of the following, if true, best explains the result described as predictable above?
(A) A drop in demand for houses depresses prices disproportionately if earlier strong demand stimulated much new construction.
(B) Real estate agents do not earn the commission on houses they help sell until the sale is actually executed.
(C) Many people sell their old house below the asking price in order to obtain the funds to buy a new one
(D) In a housing market with rising demand, even houses that were originally overpriced usually sell at the asking price.
(E) For many sellers of houses, the initial asking price comes to represent the true value, below which they will not sell.
Re: In some countries, real estate agents negotiating with prospective
[#permalink]
Show Tags
09 Apr 2012, 16:51
4
4
This indeed as a resolve the paradox question, because there is a sharper decrease in the number of homes sold than the drop in the market alone accounts for.
We need an answer choice that best explains this trend:
a) A drop in demand for houses depresses prices disproportionately if earlier strong demand stimulated much new construction.
Doesn't help explain the sharper drop in home sales.
b) Real estate agents do not earn the commission on houses they help sell until the sale is actually executed.
c) Many people sell their old house below the asking price in order to obtain the funds to buy a new one.
Here we are dealing with sellers who sell low, not those who can't sell because their price is too high.
d) In a housing market with rising demand, even houses that were originally overpriced usually sell at the asking price.
We are dealing with a housing market with falling demand.
e) For many sellers of houses, the initial asking price comes to represent the true value, below which they will not sell.
This answer choice suggests that sellers will not go below a certain value because they believe that the house to be valued at the cost of their initial offer. Since their initial offer is high (the agent who makes the highest bid is more likely to be recruited), these sellers will unlikely be able to sell their homes. ANSWER _________________
Re: In some countries, real estate agents negotiating with prospective
[#permalink]
Show Tags
23 Mar 2012, 02:17
1
Clearly (E).
A: Unrelated. We have no information about earlier strong demand. B: Out of scope. The commission of the agents is not being discussed here. C: Out of scope. Old and new houses are not being discussed here. D: We are discussing a market with falling, not rising, demand. Out of scope. E: CORRECT. If the initial asking price is the minimum that the seller will accept, a lot many more houses will remain unsold than could be explained by just a drop in demand. This will happen because less houses will be sold due to lesser demand AND even those houses that could have been sold (in spite of the reduced demand) will remain unsold because the owners perceive that the price being offered is too low
_________________
GyanOne [www.gyanone.com]| Premium MBA and MiM Admissions Consulting
Awesome Work | Honest Advise | Outstanding Results
Reach Out, Lets chat! Email: info at gyanone dot com | +91 98998 31738 | Skype: gyanone.services
Re: In some countries, real estate agents negotiating with prospective
[#permalink]
Show Tags
06 Mar 2015, 07:31
eybrj2 wrote:
In some countries, real estate agents negotiating with prodpective clients who want to sell their houses all recommend initial asking prices that are as high as the current market permits. They do this because potential sellers are more likely to entrust their houses to the agent who values them highest. In a housing market with falling demand, the predictable result is a sharper drop in the number of houses sold than the drop in demand alone woyld account for.
Q) Which of the following, if true, best explains the result described as predictable above?
a) A drop in demand for houses depresses prices disproportionately if earlier strong demand stimulated much new construction.
b) Real estate agents do not earn the commission on houses they help sell umtil the slae is actually executed.
c) Many people sell their old house below the asking price in order to obtain the funds to buy a new one
d) In a housing market with rising demand, even houses that were originally overpriced usually sell at the asking price.
e) For many sellers of houses, the initial asking price comes to represent the true value, below which they will not sell.
Please explain why A is wrong???
_________________
Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.
I hated every minute of training, but I said, 'Don't quit. Suffer now and live the rest of your life as a champion.-Mohammad Ali
Re: In some countries, real estate agents negotiating with prospective
[#permalink]
Show Tags
07 Mar 2015, 00:13
eybrj2 wrote:
In some countries, real estate agents negotiating with prodpective clients who want to sell their houses all recommend initial asking prices that are as high as the current market permits. They do this because potential sellers are more likely to entrust their houses to the agent who values them highest. In a housing market with falling demand, the predictable result is a sharper drop in the number of houses sold than the drop in demand alone would account for.
Q) Which of the following, if true, best explains the result described as predictable above?
a) A drop in demand for houses depresses prices disproportionately if earlier strong demand stimulated much new construction.
b) Real estate agents do not earn the commission on houses they help sell until the sale is actually executed.
c) Many people sell their old house below the asking price in order to obtain the funds to buy a new one
d) In a housing market with rising demand, even houses that were originally overpriced usually sell at the asking price.
e) For many sellers of houses, the initial asking price comes to represent the true value, below which they will not sell.
I am finding it really hard that what are the two things compared here
1) a sharper drop in the number of houses sold (so ideally if 100 houses would have been sold now only 20 would be sold ) 2) the drop in demand alone would account for. ( what is this ? completely bounced over my head. )
Re: In some countries, real estate agents negotiating with prospective
[#permalink]
Show Tags
07 Mar 2015, 00:37
Lucky2783 wrote:
eybrj2 wrote:
In some countries, real estate agents negotiating with prodpective clients who want to sell their houses all recommend initial asking prices that are as high as the current market permits. They do this because potential sellers are more likely to entrust their houses to the agent who values them highest. In a housing market with falling demand, the predictable result is a sharper drop in the number of houses sold than the drop in demand alone would account for.
Q) Which of the following, if true, best explains the result described as predictable above?
a) A drop in demand for houses depresses prices disproportionately if earlier strong demand stimulated much new construction.
b) Real estate agents do not earn the commission on houses they help sell until the sale is actually executed.
c) Many people sell their old house below the asking price in order to obtain the funds to buy a new one
d) In a housing market with rising demand, even houses that were originally overpriced usually sell at the asking price.
e) For many sellers of houses, the initial asking price comes to represent the true value, below which they will not sell.
I am finding it really hard that what are the two things compared here
1) a sharper drop in the number of houses sold (so ideally if 100 houses would have been sold now only 20 would be sold ) 2) the drop in demand alone would account for. ( what is this ? completely bounced over my head. )
can someone please help me to understand ?
thanks Lucky
i think i got it after reading the stem 10 times, and this is the problem i am facing with most of the CR questions that i take a lot of time to understand what is happening in the stem. Let me try to summarize the question stem. on Agents' recommendation the sellers are asking for price as high as current market price. So if there is a falling demand then such advise to sell at current market price or basically sellers strong stand to sell it only at asking price would further cause the demand to fall.
so lets assume there were 10 old house and 10 new house , current market price for old units is 100K $ and new units is 150K $ , lets assume demand is falling , what will happen if the Old unit Owners are not ready to decrease the unit cost ? the demand will further go down .
E explains this most correctly.
Experts ( ChrisLele ), please verify my reasoning.
Re: In some countries, real estate agents negotiating with prospective
[#permalink]
Show Tags
30 Oct 2015, 21:57
Hi Samichange,
(A) is wrong because it doesn't state anything regarding the sharper drop in the number of houses sold. It just says that drop in demand lowers the prices disproportionately. We are looking for an option which helps us to understand why there is sharper drop in the number of houses sold than the drop in the demand.
Re: In some countries, real estate agents negotiating with prospective
[#permalink]
Show Tags
17 Aug 2018, 05:58
Hello from the GMAT Club VerbalBot!
Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).
Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________
close
67% (02:33) correct 
