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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!
Message sent from clients to their real estate agent, in response to the agent's 10:15 AM message

10:52 AM - We are glad to hear that someone has made an offer on our home! You are right, though. Their offer is very low compared to our asking price. While we understand that is the nature of negotiation, we are reluctant to give so much ground that we end up at a price that's too low for us. After giving it some thought, we think that making a counter offer at $350,000 makes sense. That gives us room to negotiate more if the buyer wants to make another counter offer. Also, there are other concessions we would be willing to make besides price, if you think that might help us reach a deal. Please communicate our counter offer to the buyer, and let us know how it goes.
Message sent from a real estate agent to his clients, in response to their 10:52 AM message

12:28 PM - I talked to the buyers' agent, and it sounds as though they are willing to negotiate further on price, although the buyers have said that $350,000 is "a lot more' than they can afford. I also mentioned your willingness to negotiate on items other than price, and they have expressed that making this sale happen no later than mid-August appeals to them, they can get settled before the new school year starts for their children. I expect that, if you offer them a price of $330,000 and agree to make the deal happen by early August, they will agree to a deal. Please let me know what you would like to do.


YesNo 
 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.
 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.

  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.

  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.

  3. 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.

  4. 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.