Yep.  That's the story in my area.  It's sad too in a declining market for the owner to be misled about value and flattered into listing.  It's one of the root causes of our real estate market debacle.

Welcome to the Real Estate business and we call it Buying a Listing!  It happens all the time and we deal with it at least every couple of weeks.  We are in Seattle and soon you guys may be seeing the discount brokers offering to sell their house for a 1% commission or like some companies do, they rebate most of their commission back to the buyer at closing.  What we do is show people our track record, that our listing sell for 99.8% of asking price and sell in an average of 10 days.  Then we try to show them what some other agents track records are.  We'll print out the MLS sheet in their price range for sold properties and show them usually that homes that sell quickly sell for the most money and if homes need to have price reductions then they usually sell for less than they would have if they were priced correctly to begin with.  It's alway good to try to find out who you are competing with, but most buyers won't tell you so you just have to generalize.  But look at it from the buyers stand point:  if you told me my home was worth $400,000 and another agent with a big company told me it was worth $450,000, gee for $50,000 I may be will to take a chance that they are correct...but the question is am I will to sell it for $390,000 if the agent is wrong?  You will also run into the situation where you tell the seller that his home is worth more than what some other agents have told them...so I guess it all comes down to the agents experience, creditability and delivery.  This is a great business!

I will only list at what selling comps are at.  The only drawback is that I do send out CMA's and point out the declining market but no one wants to listen.  As BB says:  I never promised you a rose garden!