Do the Phrases "Below Market Value" or "Below Appraised Value" in MLS Listings Convey Useful Information to the Market?

Marcus Allen and Charles Carter

Journal of Housing Research, 2010, vol. 19, issue 2, 185-194

Abstract: Property sellers and their agents sometimes use the phrases "below market value" and "below appraised value" in marketing efforts for their properties. This study questions whether or not there are price and/or time-on-market effects associated with these phrases. The findings indicate that both phrases convey useful information to the market and are not mere puffery in MLS listings. The phrase "below market value" leads to lower transaction prices of approximately 7% and the phrase "below appraised value" leads to lower transaction prices of approximately 3%. The results reveal no significant time-on-market effect for the phrases "below market value" or "below appraised value."

Date: 2010
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DOI: 10.1080/10835547.2010.12092023

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