Sellers will never be able to do the marketing and have the consumer reach that a full time, professional Realtor will have. Seller may sell at a price without commission but do they really net more money?
Buyers will not have the satisfaction of having a full time professional- knowledgeable in the market and transactions, to advise them.
"For sale by owners" sellers may let a buyer work with an agent for a commission.
1. Most buyers are very uncomfortable having the owner tour them through the home. They will probably regale you with how they did this to the home or this is where there kids did that. First of all, you don't care. Second, you may not ask the hard questions or feel free to speak freely about the property with the owner right there. Most of my buyers feel uncomfortable even if the owner is present during the showing.
2. Most likely, the owner is not a real estate professional. So, they don't really know what they are doing. If you are trying to buy directly from them or even if you are using a Realtor, it will be difficult. Because they are not in the industry, most owners think their home is worth more than it is and do not know what to reasonably ask or take for the house.
Also, as a buyer, the law affords you some protection regarding disclosures for lead paint, radon, and problems with the home, plus equal housing (non discrimination). A single home owner selling their home will likely not comply with these or even use the correct contracts, etc. And in some cases, the law doesn't require them to comply. This could result in problems later with closings, mortgage approval, or problems later with the home,etc.
So - it is a deal to use FSBO instead of dealing with a Realtor. First, you won't save any money and it may cost you money. Ultimately, the answer is as simple as this. Would you go to court without a lawyer or perform your own surgery? No, the professionals have your best interest at heart and will ensure you do not get a lemon.
Some FSBO may be real estate agents (active or retired) and want to save having to pay a listing broker.
Buyers sometimes prey on FSBO, because they know they are looking to save the commission and the buyers can sometimes get a better deal.
I'm a real estate agent that is full time and I sell a lot of my own homes that I purchase and rehab. I don't attempt to sell them FSBO, I still utilize all of the marketing that I would for any of my clients. Believe me, it pays off. Most homes now a days are typically sold by another agent than the listing agent, but having the knowledge of what the real estate business is currently experiencing in today's tough economy is critical.
As long as you are working with a REALTOR to represent you on the purchase, they should know enough to protect you from a FSBO. I've never ruled out looking into FSBO with my buyer clients and have closed a few as well.
Best of luck!