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Having this information, we don’t need to look noncommittally to set a threshold

Instead, we can set one going in, ignore everything below it, and take the first
option to exceed it. Granted, if we have a limited amount
of savings that will run out if we don’t sell by a certain
time, or if we expect to get only a limited number of offers
and no more interest thereafter, then we should lower our
standards as such limits approach. (There’s a reason why
home buyers look for “motivated” sellers.) But if neither
concern leads us to believe that our backs are against the
wall, then we can simply focus on a cost-benefit analysis of
the waiting game.
Here we’ll analyze one of the simplest cases: where we
know for certain the price range in which offers will come,
and where all offers within that range are equally likely. If
we don’t have to worry about the offers (or our savings).

running out, then we can think purely in terms of what we
can expect to gain or lose by waiting for a better deal. If we
decline the current offer, will the chance of a better one,
multiplied by how much better we expect it to be, more
than compensate for the cost of the wait? As it turns out,
the math here is quite clean, giving us an explicit function
for stopping price as a function of the cost of waiting for an
offer.

This particular mathematical result doesn’t care whether
you’re selling a mansion worth millions or a ramshackle
shed. The only thing it cares about is the difference
between the highest and lowest offers you’re likely to
receive. By plugging in some concrete figures, we can see
how this algorithm offers us a considerable amount of
explicit guidance. For instance, let’s say the range of offers
we’re expecting runs from $400,000 to $500,000. First, if
the cost of waiting is trivial, we’re able to be almost
infinitely choosy. If the cost of getting another offer is only
a dollar, we’ll maximize our earnings by waiting for
someone willing to offer us $499,552.79 and not a dime
less. If waiting costs $2,000 an offer, we should hold out
for an even $480,000.


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About Unknown

ZAKARIA AL BAZZAR, 19 yo, university student. love everything about new tech, and I'm sharing it with you :)
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