It used to be that people would price with lots of negotiating room or "cushion", but pricing these days is usually right at or around market value. Consumers are smarter than they used to be. They have access to more information than ever, and most people really don't want to play the "back and forth" games. A lot of interest and willingness to work with one another can happen when people sign back offers too many times (sometimes, once is too many!). I had a deal that fell apart a few weeks ago for a difference of just $1,000 and there is still regret on my client's part for not being a little more reasonable.
When it comes to our market, there are often times when properties get multiple offers. It happens more often in places like Vancouver or Toronto, but it still happens in Waterloo Region. It's an exciting thing for the seller, fore sure, but can also be a little unsettling because it can backfire.
Some buyers walk away when they realize they are competing. Some overpay because they want to win. Others end up taking risks they wouldn't normally take, like going in without conditions. It can be a risky situation for buyers, and is something that needs to be handled with as little emotion as possible. And even for sellers, how do they know for certain that the buyer doesn't need a finance condition? Their deal could fall apart if there are unforeseen issues.
Here is an interesting article on the subject: CBC News Canada