Jason - some sellers have it in their mind exactly like you said. They know what the market price is for their home, but they automatically assume that people will bid low, and then they can meet in the middle.
The best way to determine what to pay for a home is to have your buyers agent do a comparative market analysis to determine the market price for the home based on recently SOLD properties. Make sure to take into account any seller concessions for the deals, if those are included in your local MLS system.
Submit your offer along with a copy of the market analysis to show why you are bidding that. Keep in mind, you are showing them that you know what the home is worth, so don't underbid the market price unless it is in poor condition.