Do you really even need the wall? If the property line is far enough to the right of the wall in the picture and you can get a mini-excavator in there you might be able to take out the wall, excavate back to create a steep slope and then put in some rip-rap or seed it.
Or as others have suggested, take out the veneer and pretty it up (but it will still be fugly). Or put a faux-wall up with PT decking anchored into the cinderblocks so it will "look" plumb and less ugly.
In any event, from the picture it would not appear to be a safety issue, the issue seems more to be an agent trying to limit their liability and maximize their commission.
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.