John is a real estate agent and faced with the opportunity of offering for sale three residential properties of a wealthy woman. Of the three houses he will sell one located in Arlington, one located in Belmont, one located in Cambridge, all suburbs of Boston. Several conditions are placed on the proposal. The first two stipulates a definite sales price for each property: $250,000 for the house in Arlington, $500,000 for the one in Belmont and $1 million for the one in Cambridge. The second condition indicates that the properties must be sold one at a time, starting with the house in Arlington. If the Arlington property is sold, then Warren, if he wishes to continue, can choose to offer next either the Belmont or the Cambridge property. If he continues and succeeds in selling his second choice, then he will have the option to place the third property on the market. The final condition states that once a particular property is offered for sale, it will have to be sold within 30 days, or the entire arrangements will be terminated. John will receive a commission of 4% of the selling price for any successful sale. John concluded that the cost for attempting to sell the Arlington property (which, since it is first, must also bear the set up costs for the entire deal) would be about $8000. The corresponding figure for the Belmont property is $2000, and for the Cambridge property, $4000. All the associated costs incur before the house is offered for sale.

If John offers Arlington house and sells it, what should be his next steps?

1. Offer Belmont house first and then reevaluate
2. Take the $2000 and quit
3. Offer Cambridge house first and then reevaluate
4. Offer both Belmont and Cambridge houses together.