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In this scenario, potential buyers base their offers on their perceptions of the proportion of homes on the market that have been properly maintained. Potential buyers may see a large proportion of homes that require maintenance. In this case buyers will likely offer (lower prices for high-quality homes/ higher prices for low cost homes) than they would if they were certain that homes have been properly maintained. At the same time, sellers of well‑maintained homes may (price their homes too low/ not offer their homes for sale)This situation is known as (adverse selection of sellers/ moral hazard/ adverse selection of buyers)
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