In the following question, a sentence is given in Direct speech. Choose the option that best expresses the same idea in Indirect or reported speech. She said, "We were thinking of selling the house but we had decided not to."

Introduction / Context:
This question examines tense consistency when reporting a complex past situation. The speaker is narrating a sequence of two related past actions: first, an ongoing thought about selling a house, and next, a firm decision not to sell. Candidates must select an Indirect speech form that keeps the correct order and nature of these actions while following the rules of tense backshift.

Given Data / Assumptions:

• Direct speech: She said, "We were thinking of selling the house but we had decided not to."
• The reporting verb "said" is in the past tense.
• There is a past continuous action "were thinking of selling the house".
• There is a past perfect decision "had decided not to".
• "We" in Direct speech refers to the speaker and some other person or persons, which becomes "they" in reporting with an external viewpoint.

Concept / Approach:
In reported speech, past continuous often changes to past perfect continuous when the reporting verb is in the past and we wish to emphasise that the thinking happened before another past action. Similarly, past perfect usually remains past perfect. Therefore, "were thinking" becomes "had been thinking", and "had decided" remains "had decided". The pronoun "we" often becomes "they" when the sentence is reported by someone outside the original group. The conjunction "but" is kept to show the contrast between consideration and final decision.

Step-by-Step Solution:

Verification / Alternative check:
This version clearly shows that the thinking phase preceded the final decision and that both events are viewed from a later point in the past. The use of "had been thinking" and "had decided" expresses a completed chain of events relative to the time of speaking. The structure is grammatical and preserves the original meaning that although selling the house was considered, the decision ultimately was not to sell.

Why Other Options Are Wrong:
Option A mixes past continuous with simple past and loses the clear ordering of events. Option B changes "were thinking" to "thought", which makes the ongoing nature of the consideration less clear. Option C uses "have been thinking", which is present perfect and does not fit with a past reporting verb "said". Only option D correctly reflects both the continuous consideration and the completed decision before the reported moment.

Common Pitfalls:
A frequent error in reported speech is to apply a single tense like simple past to all clauses, ignoring subtle differences between ongoing and completed actions. Another issue is confusion between past perfect and present perfect in longer sentences. To handle these questions well, learners should identify the sequence of events and choose tenses that reflect what happened first and what happened later within the past.

Final Answer:
The correct Indirect speech sentence is She said that they had been thinking of selling the house but had decided not to.