In Arlington, you will get your price. I put an offer on a home I wanted here, and my offer was $100k over asking. I didn't get it. Winning offer was $125k over ask. List price was $650k - way under market for that particular home. They had 13 offers.
In this particular case, the price was WAY off, and it wasted a lot of people's time and money (I'm thinking home inspections, which are expensive). $25-$50k over ask is definitely not overboard and I see homes that are worth it sell that much over ask routinely.
It's funny - as a realtor, I know intellectually that I will get a better price at the end by pricing low and getting maximum exposure, but when I sell my own homes, I have all this anxiety that it will sell for that lower price.
Remember that this is only one strategy to sell a home, and you are in the driver's seat. If you don't want to employ that strategy, you're the boss. Tell your realtor that you'd prefer a strategy where you list more closely to market value.
Generally speaking, the statistics in Arlington predict that your realtor's strategy *may* net you more, but you're the one that has to be comfortable with it and it's your home, so do what works best for you.