I worked with a Prudential realtor when I toyed around (very briefly) with the idea of buying a couple of years ago, and her explanation was that the market moves so fast that to list something at a specific price did not take into account the day to day market fluctuation.
I think the real reason is to get buyers to see more properties. A buyer that decides he/she can afford $500-550k will be shown a house with a $549k-$600k “value range” (same goes for someone looking for $600k-650k). If low end buyer falls in love with the house, he/she can be convinced that the increase in their monthly payment will be negligable if they go ahead and bid above their “affordability”.
