Primarily because people hear what they want to hear.  They think they are getting the best price and they don't realize that it's the market that sets the price, not the real estate agent.

You know I don't get this. People will hear what they want, to, but I will present the truth. I've lost listings because of this, but the sales price and DOM always shows the truth...and often times that listing sits for so long in my rural area, that it sells for less than what I said. So it ends up costing the seller in the end. 

Gabe Sanders  That is a good question . My answer is the same .  When every other agent is showing them in black and white what the properties are selling for.  Then an agent tells them they can get more GREED kicks in . They list with the guy that tell them the highest price even though every other agent told them less . The one agent that was a fool that is greed.

I agree with Debbie.

I like the answer by Hannah Williams. All home sellers tend to be greedy. Be thankful when you are working with the exceptions.

Come on Gabe you know the answer to that . They are greedy 

Of course sellers want the most money out of their property wouldnt we all.

They hear what they want to hear and sometimes, very rarely though, they get lucky, haha.

I am in agreement with all the answers above. It is mainly greed from the sellers and listing agent. They know that most of sellers want to walk away with the most possible gain. There is a LA in my area that presents himself as the top producer by monthly postcard marketing, lots of listings with over rated prices, however, what the public does not see is his listings don't sell until he reduces the price below the market value.

Wishful thinking.

Human nature.

Because that's what they want the price to be!