LOYAL AG said:
Discount brokerages are great if the market you're selling in is good. Of course it's a good market that creates the glut of part time soccer mom realtors we see today in a lot of places, BCS included. In that world most anyone can sell a house and I'd argue that using a discount realtor is a waste of money with FSBO would work just as well and save a percent or two. It's when the market is bad that you realize the value of a good realtor. A good realtor will earn their commission.
Except FSBO doesn't get you on the MLS (at least without paying a service, which when I sold FSBO a few years ago, wasn't exactly cheap).
And my experience with FSBO brought out some "sketchy" buyers (i.e., people who wanted to do owner-financing), and not a single potential buyer who looked at my house was brought to it by a realtor. I listed the house on Zillow (which at the time was free and included 3-4 pictures; you could pay for a "premium" service) and buyers found it that way. The buyer's agents essentially black-balled my house (but they all knew it was for sale because every day I got postcards and letters in the mail from realtors asking to list my house). I think most buyer's agents don't want to bother with FSBOs because they don't think they will get their 3% (even if the seller says they will in the listing).
I think, at least for now, having a realtor/firm attached to a listed property brings a certain amount of "credibility" that will result in more potential buyers seeing the house. But, as someone previously pointed out, this is all a function of location - some places are much better suited to this type of arrangement than others. In the area I live now, I wouldn't do flat-fee.
With that said, I'd like to see both sides go "flat-fee" and sellers pay their agent and buyers pay theirs. Based on my experience as a buyer and seller of multiple properties, there are some buyer's agents that deserve 3% and others that do not - it should be up to the buyer to negotiate that with their rep. I hate the system we have now where buyer's agents just assume they will get (or deserve) 3% from the seller - unfortunately, I've seen that expectation really undermine a negotiation/sale, and that's not fair to buyers.