Ask HN: Optimal negotiating strategy for real estate purchases

We're on the buy side of a real estate transaction right now (actually, several, if you count various auctions we've been in and an escrow we dropped out of). Some good friends of ours are on the sell side right now.

We're both finding similar issues -- in our market at least, the convention seems to be that sellers set lower-than-market listing prices, leading to multiple-bid situations with competition on both price and terms (such as size of down payment and whether there are appraisal and inspection contingencies), and then realtors who optimize for the transaction closing rather than the getting the best terms for their clients.

What is the best way to play from either buy or sell side in your view?