Here in Australia, underestimating by realty companies is the norm. I watched a friend go through buying a house last year, and some houses were advertised at prices that were below reserve [1]. As in, at auction, the bidding reached the advertised price, but the buyer's floor price hadn't been reached yet, so the house was not 'on the market' yet...
[1] In one case, 80k below reserve. You know you've hit the reserve price, because in my state, the auctioneer is legally required to annouce the house is 'now on the market'
Starting at the reserve can spook some bidders and make it hard to start the auction. Starting below the reserve usually gets some momentum going in the bidding, and that tends to carry over to a higher final price.
Advertising a price that's below the reserve is pretty unethical, though it's not illegal (the seller is never locked into a price). People end up wasting time and money (getting reports) for houses that were never actually in their price range in the first place.
[1] In one case, 80k below reserve. You know you've hit the reserve price, because in my state, the auctioneer is legally required to annouce the house is 'now on the market'