I am happy, yet sad, the memories...

[jsd]

What area are you in?

[Prloko]

I'm not a real estate guru or anything, so walk me through this. How does one convince a potential buyer to negotiate the price up from the listed price instead of down?

Johan already explained it above. Some agents recognizing a gem, will list the price under market. When a flood of buyers come to the open house to catch a "deal", one of the spouses will absolutely fall in LOVE with the PERFECT house. The seller will receive multiple bids at asking, then a bidding war between the buyer happens. Remember, although houses are sold by the asking prices, buyers tend to price a house by their monthly payment. Differences in thousands from selling price is only a minor difference in monthly payments, and buyers (and their agents) rationalize the increased bid as only "a few dollars more per month". This causes feverish bidding until ultimately the seller receives a lot more and the two agents split a sizable commission. Example, a $1.795M mortgage would require a $359,000 dp, leaving a balance of 1,436,000. That translates to a monthly mortgage of ~$6,700 per month depending on interest rate. A $2.0M sale would have a 1.6M mortgage with a monthly payment around ~$7,500. Now for most people that's a huge difference, but for the folks who can afford a 2M house, the few hundred per month really isn't worth it. For smaller value homes, the difference is even less extreme and can only be $100 dollars per month.