Read the following regarding 2 different property management companies:

All R Welcome Realty owns 500 single family rental homes. Prospective tenants are encouraged to apply in-person, online, or by mail. Prospects are told that there is a credit check, but they will take each case individually. They do charge $10 to apply which covers the cost of running a credit report. Otherwise, they will not automatically be disqualified based upon a low credit score. The agents will meet prospective tenants at their convenience to view homes. It is not uncommon for prospects to come to the office and ride with the agent to the property. Agents will show properties to tenants before they are officially approved. Once approved, tenants can pay their rent either online or in person. There is a $10 late fee if the tenant pays after the 10^th of the month. Tenants can report problems or repairs by calling, coming to the office, or through the online portal.

Exclusive 4 U Realty owns 500 single family rental homes. Prospective tenants are required to apply online only and pay a $150 non-refundable application fee that includes a credit check. No tenant will be accepted that falls below the credit threshold of 550. Prospective tenants must make appointments with agents to view properties. No properties will be shown until after the tenant is approved. The agent will meet the prospects at the property. One approved, tenants must pay their rent through the online portal. No cash or in-person methods of payment is permitted. There is a $50 late if the tenant pays after the 10^th of the month. Tenants can only report problems or repairs by calling or using the online portal. If the tenant uses the online portal to report problems, they receive immediate confirmation including a report number that can be tracked.

Name the instance of adverse selection and how it could be mitigated possibly through screening. Please provide details and elaborations.

Answer rating: 100% (QA)

Answer In the scenario described the instance of adverse selection occurs in the practices of All R ... View the full answer