Real Estate The expenses for Jorge, a real estate agent, to list, advertise, and its attempt to sell a house are $1400. If Jorge succeeds in selling the house, he will receive a commission of 6% of the sales price. If an agent with a different company sells the house. Jorge still receives 3% of the sales price. If the house is unsold after 3 months. Jorge loses the listing and receives nothing. Suppose that the probability that he sells a $150.000 house is 0.2, the probability that another agent sells the house is 0.5, and the probability that the house is unsold after 3 months is 0.3. Determine Jorge’s expectation if he accepts this house for listing. Should Jorge list the house?
Real Estate The expenses for Jorge, a real estate agent, to list, advertise, and its attempt to sell a house are $1400. If Jorge succeeds in selling the house, he will receive a commission of 6% of the sales price. If an agent with a different company sells the house. Jorge still receives 3% of the sales price. If the house is unsold after 3 months. Jorge loses the listing and receives nothing. Suppose that the probability that he sells a $150.000 house is 0.2, the probability that another agent sells the house is 0.5, and the probability that the house is unsold after 3 months is 0.3. Determine Jorge’s expectation if he accepts this house for listing. Should Jorge list the house?
Solution Summary: The author calculates the expected gain of Jorge if he accepts a house for listing, and determine whether Jorge should list the house.
Real Estate The expenses for Jorge, a real estate agent, to list, advertise, and its attempt to sell a house are $1400. If Jorge succeeds in selling the house, he will receive a commission of 6% of the sales price. If an agent with a different company sells the house. Jorge still receives 3% of the sales price. If the house is unsold after 3 months. Jorge loses the listing and receives nothing. Suppose that the probability that he sells a $150.000 house is 0.2, the probability that another agent sells the house is 0.5, and the probability that the house is unsold after 3 months is 0.3. Determine Jorge’s expectation if he accepts this house for listing. Should Jorge list the house?
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