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# With problems in the mortgage industry and a declining

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Manager
Joined: 09 Apr 2013
Posts: 97
Location: India
WE: Supply Chain Management (Consulting)
With problems in the mortgage industry and a declining  [#permalink]

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19 Dec 2013, 11:45
2
13
00:00

Difficulty:

55% (hard)

Question Stats:

64% (01:53) correct 36% (02:09) wrong based on 543 sessions

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With problems in the mortgage industry and a declining economy, overall housing sales are down by more than 40% percent. Online real estate broker sites, however, have seen increased traffic and revenues are up by more than 10 percent in the slumping real estate market.

Each of the following, if true, helps to explain the improved performance of online real estate brokers during the housing slump EXCEPT:

A) During a slump in the housing market, buyers are more likely to shop online broker sites in search of the best possible price.

B) When the housing market is strong, both buyers and sellers rely on traditional real estate brokers in an order to buy or sell property more quickly.

C) The cost of selling a property with an online broker is a fraction of the cost of using a traditional real estate broker.

D) Online brokers devote more advertising resources to attracting customers during a downturn in the real estate market than do traditional retailers.

E) Customers of online brokers, but not customers of traditional brokers, can control the cost of listing and selling their house by choosing from a number of available packages and options.

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Retired Moderator
Joined: 16 Jun 2012
Posts: 988
Location: United States
Re: With problems in the mortgage industry and a declining  [#permalink]

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20 Dec 2013, 02:42
7
3
Hi mate. You deserve a kudo. Very impressive question.

Three important notes:

(1) The logic of the question, which I believe is more of LSAT than of GMAT, is:
A ==> B
Not A ==> Not B .

This is WRONG conclusion.
For example:
I love wearing suit in formal events. This does NOT mean I don’t love wearing suit in non-formal events.

(2) This is “except” question. Be aware!

(3) In paradox questions, there is NO conclusion, just facts.

ANALYZE THE STIMULUS:

Fact: With problems in the mortgage industry and a declining economy, overall housing sales are down by more than 40% percent.
Fact: Online real estate broker sites, however, have seen increased traffic and revenues are up by more than 10 percent in the slumping real estate market.

Question: Each of the following, if true, helps to explain the improved performance of online real estate brokers during the housing slump EXCEPT:

A) During a slump in the housing market, buyers are more likely to shop online broker sites in search of the best possible price.
Wrong. A can explain the paradox. If buyers are more likely to shop online broker ==> Online real estate brokers’ revenue increase.

B) When the housing market is strong, both buyers and sellers rely on traditional real estate brokers in an order to buy or sell property more quickly.
Correct. That people prefer tradition brokers in strong market does NOT mean people prefer non-traditional brokers, says online brokers, in weak market. This is WRONG logic and does not help to explain the paradox.

C) The cost of selling a property with an online broker is a fraction of the cost of using a traditional real estate broker.
Wrong. Clearly C explains why online brokers’ revenue increase.

D) Online brokers devote more advertising resources to attracting customers during a downturn in the real estate market than do traditional retailers.
Wrong. Clearly D explains why online brokers’ revenue increase.

E) Customers of online brokers, but not customers of traditional brokers, can control the cost of listing and selling their house by choosing from a number of available packages and options.
Wrong. Same as in A. If customers prefer online brokers for their conveniences, online brokers’ revenue will increase.

Hope it helps a bit.
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##### General Discussion
Manager
Joined: 09 Apr 2013
Posts: 97
Location: India
WE: Supply Chain Management (Consulting)
Re: With problems in the mortgage industry and a declining  [#permalink]

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20 Dec 2013, 03:25
Hi pqhai,

That was a very helpful explanation. I am struggling with timing issues especially when I face these type of "EXCPET" question. My main aim behind posting this question is to get some techniques to improve timing along with accuracy. It took me closer to 3:00 minutes to get the right answer.

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"Pay attention to every detail"
Manager
Joined: 25 Sep 2012
Posts: 232
Location: India
Concentration: Strategy, Marketing
GMAT 1: 660 Q49 V31
GMAT 2: 680 Q48 V34
Re: With problems in the mortgage industry and a declining  [#permalink]

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06 Mar 2014, 01:44
Why does the option D says tradition retailers? Just to confuse you?
Senior Manager
Joined: 07 Nov 2012
Posts: 250
Schools: LBS '14 (A\$)
GMAT 1: 770 Q48 V48
Re: With problems in the mortgage industry and a declining  [#permalink]

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06 Mar 2014, 11:22
1
b2bt wrote:
Why does the option D says tradition retailers? Just to confuse you?

Hey B2bt,

I hope I'm getting your question right, shout if not:

'traditional retailer' is basically a term used for 'bricks and mortar' business, and is used to contrast with online retailers.

So in this case it is used to allow the author to set up a comparison between online and non online ('traditional).

Hope that helps

James
Intern
Joined: 06 Feb 2014
Posts: 20
Re: With problems in the mortgage industry and a declining  [#permalink]

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27 Aug 2014, 04:27
Hi ,

I'm reopening this discussion. Need help to understand why D helps explain the paradox here.

D just says that Online retailers spend more resources on attracting new customers that the traditional retailers. So what??
This does not guarantee that those attracted would necessarily convert into sales.
I do agree B is correct answer but I'm just analyzing the options here.
Manager
Joined: 06 Mar 2014
Posts: 83
Re: With problems in the mortgage industry and a declining  [#permalink]

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18 Jun 2015, 04:25
Yeahh i also thought the same...
souvik101990
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Joined: 02 Feb 2013
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Re: With problems in the mortgage industry and a declining  [#permalink]

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18 Jun 2015, 08:24
Glad this got bumped. Shree, you're clear on A, C and E as incorrect?
Imagine you're in a Board meeting. You're batting around reasons for the good news. The Directors quickly agree A/C/E are valid suppositions (not "guarantees"). You then propose D as a possible explanation, nothing more; your colleagues all agree - seems reasonable, more spend usually = more revenue or traffic. Now a Director speaks up and says, "Well, we know there's a boom for trad brokers in good times . . . " and his neighbor finishes for him: "Yes, but what about the other side: online activity in bad times?" So B, as conjecture, as stated, is not helpful.
It's a salty question!
"revenues are up by more than 10 percent in the slumping real estate market" is, to me, a bit of poor english and distracting thereby.
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Re: With problems in the mortgage industry and a declining  [#permalink]

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11 Apr 2016, 02:18
2
With problems in the mortgage industry and a declining economy, overall housing sales are down by more than 40% percent. Online real estate broker sites, however, have seen increased traffic and revenues are up by more than 10 percent in the slumping real estate market.

Each of the following, if true, helps to explain the improved performance of online real estate brokers during the housing slump EXCEPT:

a> During a slump in the housing market, buyers are more likely to shop online broker sites in search of the best possible price.
b> When the housing market is strong, both buyers and sellers rely on traditional real estate brokers in an order to buy or sell property more quickly.
c> The cost of selling a property with an online broker is a fraction of the cost of using a traditional real estate broker.
d> Online brokers devote more advertising resources to attracting customers during a downturn in the real estate market than do traditional retailers.
e> Customers of online brokers, but not customers of traditional brokers, can control the cost of listing and selling their house by choosing from a number of available packages and options.

=======

My question is why E is not the correct answer?
Independent of the situation of the economy, Customers are of the online can control the cost of listing and selling. Because this is the feature available on the website and it will remain there even when the economy is good or bad.

Any suggestions?
Marshall & McDonough Moderator
Joined: 13 Apr 2015
Posts: 1683
Location: India
Re: With problems in the mortgage industry and a declining  [#permalink]

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11 Apr 2016, 06:16
Problems in mortgage industry + declining economy --> Overall decrease in housing sales.
Online real estate brokers --> increased traffic + revenues even though the real estate market is in a decline.

We have to select an option that does not support the improved performance of online real estate brokers.

a> During a slump in the housing market, buyers are more likely to shop online broker sites in search of the best possible price. - Incorrect - Supports improved online performance.

b> When the housing market is strong, both buyers and sellers rely on traditional real estate brokers in an order to buy or sell property more quickly. - Correct - Talks about a different condition - strong housing market, whereas the argument speaks about a declining housing market. Also, this option offers support for an improved offline performance by real estate brokers.

c> The cost of selling a property with an online broker is a fraction of the cost of using a traditional real estate broker. - Incorrect - Offers support to improved online performance

d> Online brokers devote more advertising resources to attracting customers during a downturn in the real estate market than do traditional retailers. - Incorrect - Same reason as C

e> Customers of online brokers, but not customers of traditional brokers, can control the cost of listing and selling their house by choosing from a number of available packages and options. - Incorrect - Same reason as C.

Marshall & McDonough Moderator
Joined: 13 Apr 2015
Posts: 1683
Location: India
Re: With problems in the mortgage industry and a declining  [#permalink]

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11 Apr 2016, 06:22
email2vm wrote:

My question is why E is not the correct answer?
Independent of the situation of the economy, Customers are of the online can control the cost of listing and selling. Because this is the feature available on the website and it will remain there even when the economy is good or bad.

Any suggestions?

The argument speaks about a declining economy. So the scope of the argument is limited to the performance of real estate in a declining economy. Moreover, if customers who are online can control the cost of listing and selling, it provides an added incentive for the customers to buy houses online. Therefore, option E offers support for the improved online performance of real estate markets.
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Joined: 06 Nov 2014
Posts: 1873
Re: With problems in the mortgage industry and a declining  [#permalink]

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13 Apr 2016, 02:09
1
email2vm wrote:
With problems in the mortgage industry and a declining economy, overall housing sales are down by more than 40% percent. Online real estate broker sites, however, have seen increased traffic and revenues are up by more than 10 percent in the slumping real estate market.

Each of the following, if true, helps to explain the improved performance of online real estate brokers during the housing slump EXCEPT:

a> During a slump in the housing market, buyers are more likely to shop online broker sites in search of the best possible price.
b> When the housing market is strong, both buyers and sellers rely on traditional real estate brokers in an order to buy or sell property more quickly.
c> The cost of selling a property with an online broker is a fraction of the cost of using a traditional real estate broker.
d> Online brokers devote more advertising resources to attracting customers during a downturn in the real estate market than do traditional retailers.
e> Customers of online brokers, but not customers of traditional brokers, can control the cost of listing and selling their house by choosing from a number of available packages and options.

=======

My question is why E is not the correct answer?
Independent of the situation of the economy, Customers are of the online can control the cost of listing and selling. Because this is the feature available on the website and it will remain there even when the economy is good or bad.

Any suggestions?

We need to find an option that will tell why the online real estate brokers are performing better than traditional brokers.
Option E clearly gives us a reason why the online brokers are performing well and people do need more options in the time of a slump.
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Re: With problems in the mortgage industry and a declining  [#permalink]

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09 Oct 2016, 11:37
eliminated all except for B and E.
E doesn't work out since the seller has more control on the price - thus, more will use online brokers...

B stands.
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Joined: 02 Sep 2009
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Re: With problems in the mortgage industry and a declining  [#permalink]

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22 May 2018, 04:06
cssk wrote:
With problems in the mortgage industry and a declining economy, overall housing sales are down by more than 40% percent. Online real estate broker sites, however, have seen increased traffic and revenues are up by more than 10 percent in the slumping real estate market.

Each of the following, if true, helps to explain the improved performance of online real estate brokers during the housing slump EXCEPT:

A) During a slump in the housing market, buyers are more likely to shop online broker sites in search of the best possible price.

B) When the housing market is strong, both buyers and sellers rely on traditional real estate brokers in an order to buy or sell property more quickly.

C) The cost of selling a property with an online broker is a fraction of the cost of using a traditional real estate broker.

D) Online brokers devote more advertising resources to attracting customers during a downturn in the real estate market than do traditional retailers.

E) Customers of online brokers, but not customers of traditional brokers, can control the cost of listing and selling their house by choosing from a number of available packages and options.

Please post your opinions on the best ways to tackle these type of questions with minimum time consumption. :wink:

VERITAS PREP OFFICIAL SOLUTION:

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Re: With problems in the mortgage industry and a declining  [#permalink]

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16 Oct 2018, 10:23
cssk wrote:
With problems in the mortgage industry and a declining economy, overall housing sales are down by more than 40% percent. Online real estate broker sites, however, have seen increased traffic and revenues are up by more than 10 percent in the slumping real estate market.

Each of the following, if true, helps to explain the improved performance of online real estate brokers during the housing slump EXCEPT:

A) During a slump in the housing market, buyers are more likely to shop online broker sites in search of the best possible price.

B) When the housing market is strong, both buyers and sellers rely on traditional real estate brokers in an order to buy or sell property more quickly.

C) The cost of selling a property with an online broker is a fraction of the cost of using a traditional real estate broker.

D) Online brokers devote more advertising resources to attracting customers during a downturn in the real estate market than do traditional retailers.

E) Customers of online brokers, but not customers of traditional brokers, can control the cost of listing and selling their house by choosing from a number of available packages and options.

Agreed the B looks the best answer, but to cancel D aren't we making an assumption that 'Since the Online brokers are devoting more advertising resources it has to translate to more sales.
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Re: With problems in the mortgage industry and a declining  [#permalink]

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16 Oct 2018, 10:36
1
IMO option B.
Option B doesn't give a valid connected reasoning for increase of revenues.
Re: With problems in the mortgage industry and a declining   [#permalink] 16 Oct 2018, 10:36
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