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Reducing the cost of home

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Reducing the cost of home

by jeevan.Gk » Mon Aug 30, 2010 1:38 pm
The price of a finished home bought through a real estate agent incorporates an abundance of service fees charged by all the companies involved in the creation of that home and by the entrepreneur. To reduce the final cost of a home, some people choose to form purchasing groups which independently handle the process, from buying the property and receiving permits from the authorities to making architectural decisions. Handling the complete process of developing a home is complicated and presents challenges at every stage such as legal complications and construction errors.

The statements above, if true, best support which of the following as a conclusion?

a)Assuming they sell their home for the same price, individual purchasers that buy homes through agents cannot earn as much as those who buy through an independent purchasing group.
b)Most projects handled by independent purchasing groups experience complications that result in loss.
c)Homes bought through agents do not experience legal complications or construction errors during development.
d)If paying the commission awarded to the real estate agent could be avoided, the price of any home would be the same as that bought by independent purchasing groups.
e)The obvious advantage of buying a home by forming a purchasing group will result in an increase in the utilization of this method.
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by beatthegmatinsept » Mon Aug 30, 2010 1:56 pm
[spoiler]Tricky one.. I'd go for A.[/spoiler]
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by Gurpinder » Mon Aug 30, 2010 2:10 pm
IMO (C)

The stimulus:
RE Agent $ includes lots of service charges.
To reduce price, people form purchasing groups.
The task is complicated and presents challenges at every stage.
CONCLUSION: ____________

The only inference we can make is C.

c)Homes bought through agents do not experience legal complications or construction errors during development.

Whats the OA?
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by debmalya_dutta » Mon Aug 30, 2010 3:28 pm
my pick on this is A

a)Assuming they sell their home for the same price, individual purchasers that buy homes through agents cannot earn as much as those who buy through an independent purchasing group.
Using the clue provided in the question stem , the buying price (or C.P for me as an individual buyer) of a house is more when purchased through a real estate agent than when purchased from purchasing group ...
So .. (C.P of house)real estate agent > (C.P of house) purchasing group
"A" asks us to assume that (S.P of house)real estate agent = (S.P of house) purchasing group
So..when will I earn more as profit when I sell the house ... Answer - when I purchase through the purchasing group
b)Most projects handled by independent purchasing groups experience complications that result in loss.
not stated in the passage
c)Homes bought through agents do not experience legal complications or construction errors during development.
again not stated in the passage. from our day to day knowledge, these hassles always apply but this is again outside the scope of this argument
d)If paying the commission awarded to the real estate agent could be avoided, the price of any home would be the same as that bought by independent purchasing groups. What if the real estate agent's cost is a very,very small proportion of the other costs mentioned - service fees charged by all the companies involved in the creation of that home and by the entrepreneur . As such not clarified by the above question stem
e)The obvious advantage of buying a home by forming a purchasing group will result in an increase in the utilization of this method.
@Deb
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by gmatsolve » Mon Aug 30, 2010 5:16 pm
my answer is C
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by this_time_i_will » Mon Aug 30, 2010 6:23 pm
C seems good.
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by prakhag » Mon Aug 30, 2010 8:45 pm
IMO A.

As the premise states, "The price of a finished home bought through a real estate agent incorporates an abundance of service fees charged by all the companies involved in the creation of that home and by the entrepreneur".

The highlighted part refutes D.

For C, the passage doesn't state anything about the process through which homes bought from agents go through: they might or might not had legal or construction problems.

Hence IMO A

Please post OA.
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by FightWithGMAT » Mon Aug 30, 2010 10:27 pm
jeevan.Gk wrote:The price of a finished home bought through a real estate agent incorporates an abundance of service fees charged by all the companies involved in the creation of that home and by the entrepreneur. To reduce the final cost of a home, some people choose to form purchasing groups which independently handle the process, from buying the property and receiving permits from the authorities to making architectural decisions. Handling the complete process of developing a home is complicated and presents challenges at every stage such as legal complications and construction errors.

The statements above, if true, best support which of the following as a conclusion?

a)Assuming they sell their home for the same price, individual purchasers that buy homes through agents cannot earn as much as those who buy through an independent purchasing group.
b)Most projects handled by independent purchasing groups experience complications that result in loss.
c)Homes bought through agents do not experience legal complications or construction errors during development.
d)If paying the commission awarded to the real estate agent could be avoided, the price of any home would be the same as that bought by independent purchasing groups.
e)The obvious advantage of buying a home by forming a purchasing group will result in an increase in the utilization of this method.
I do not like C at all.

A close fight is between A and D.
I will go for D.
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by diebeatsthegmat » Mon Aug 30, 2010 11:17 pm
jeevan.Gk wrote:The price of a finished home bought through a real estate agent incorporates an abundance of service fees charged by all the companies involved in the creation of that home and by the entrepreneur. To reduce the final cost of a home, some people choose to form purchasing groups which independently handle the process, from buying the property and receiving permits from the authorities to making architectural decisions. Handling the complete process of developing a home is complicated and presents challenges at every stage such as legal complications and construction errors.

The statements above, if true, best support which of the following as a conclusion?

a)Assuming they sell their home for the same price, individual purchasers that buy homes through agents cannot earn as much as those who buy through an independent purchasing group.
b)Most projects handled by independent purchasing groups experience complications that result in loss.
c)Homes bought through agents do not experience legal complications or construction errors during development.
d)If paying the commission awarded to the real estate agent could be avoided, the price of any home would be the same as that bought by independent purchasing groups.
e)The obvious advantage of buying a home by forming a purchasing group will result in an increase in the utilization of this method.[/quo

i am between B and C because the passage states that if purchasing houses from A >>> cost a lot
however purchasing houses from B doesnt cost much but experience complicating and erros and blah blah

what is the answer?
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by ankurmit » Tue Aug 31, 2010 1:59 am
IMO A
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by David@VeritasPrep » Tue Aug 31, 2010 11:25 am
Process of elimination is the tried-and true way to tackle inference questions. Eliminate those choices that could be false.

One good way to eliminate answer choices is to eliminate any predictions. Since predictions are based on the future - which presumably has not yet occurred - then these are things that could be wrong. So they are not MUST BE TRUE.

Here is an example. "A standard coin has been flipped 100 times and it has come up heads all 100 times." What inference can be made?

Some will want to say, "The next flip will have to be tails because the odds are just to great, it cannot be heads again."

And others will say, " It will be heads on the next flip again, obviously something is wrong, you cannot get 100 heads in a row without some problem or trick."

But neither of these is a good answer for an inference. The coin could go heads or tails and there is no way to say which will happen, so any prediction could be false.

Generally, the only sort of future-oriented statements that can be supported are those that qualify the prediction. The use of a "might" or a "possibly" is always nice, such as "the coin might come up heads again."

Another way is to cover all of the bases. If I were to say, "the next flip will be heads, or the next flip will be tails, or the coin will land on the edge, or it won't even be flipped again." That pretty well sums up all the possibilities and so that would be a good must be true answer.

There are several predictions in these answer choices. See which ones can be eliminated this way.

Hope that helps!
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by Stuart@KaplanGMAT » Tue Aug 31, 2010 1:12 pm
jeevan.Gk wrote:The price of a finished home bought through a real estate agent incorporates an abundance of service fees charged by all the companies involved in the creation of that home and by the entrepreneur. To reduce the final cost of a home, some people choose to form purchasing groups which independently handle the process, from buying the property and receiving permits from the authorities to making architectural decisions. Handling the complete process of developing a home is complicated and presents challenges at every stage such as legal complications and construction errors.

The statements above, if true, best support which of the following as a conclusion?

a)Assuming they sell their home for the same price, individual purchasers that buy homes through agents cannot earn as much as those who buy through an independent purchasing group.
b)Most projects handled by independent purchasing groups experience complications that result in loss.
c)Homes bought through agents do not experience legal complications or construction errors during development.
d)If paying the commission awarded to the real estate agent could be avoided, the price of any home would be the same as that bought by independent purchasing groups.
e)The obvious advantage of buying a home by forming a purchasing group will result in an increase in the utilization of this method.
The correct answer to an inference question is something that MUST be true based on what's stated or implied by one or more statements in the stimulus. Wrong answers are typically outside the scope, too extreme or contradictory.

It's very difficult to predict the answer to inference questions (unlike strengthen/weaken/assumption questions, the answers for which you should always try to predict before going to the choices); accordingly, we evaluate each choice, asking ourselves "is this a MUST be true?"

Let's look at the choices:

a) we know that buying through an independent purchasing group ("IPG") reduces the final cost of a home. If the final cost of the home is less, and you sell at the same price later on, you're going to earn more money. So, (A) MUST be true... correct!

On test day we'd stop right there, but let's go into review mode and look at the remaining choices (something you should do every time you practice).

b) we don't know how many IPG homes result in complications - not a MUST be true, eliminate.

c) we know that IPGs face potential complications and construction errors, but the stimulus never mentions whether non-IPG projects face these problems - not a MUST be true, eliminate.

d) agent commission is only one of the additional costs we avoid through use of an IPG - (d) contradicts the stimulus, eliminate.

e) we have no idea if the benefits of IPGs outweigh the potential complications (and no speculation about the popularity of IPGs) - not a MUST be true, eliminate.

* * *

Out of curiosity, what's the source of the question? (a) isn't worded as tightly as it should be to avoid potential complaints about its "must be trueness", even though it's clearly intended to be the correct answer.
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