OK.. This debate touches on many factors that we aren't addressing but I will answer the Flaws issue:
#1 The reason a seller chooses not to hire a listing agent is to save some money. If his neighbor sold the same house for $350k using a realtor and he payed a 5% commision.. He actually netted $332500k after he pays for the cost of his sale.. A FSBO is never going to list his house at 332500k because he didn't have to pay a Realtor and pass that savings on to the buyer.. What would be the point? No.. A FSBO wants to feel like he has "beat the system" and put more in his pocket than he wouldhe chosen to use a Realtor. Always.
Flaw #2 FSBOs always use the highest comparable.. I can substantiate this through my own experience. FSBO's are a big part of my business. I subscribe to a service that sends me a weekly list of every FSBO in the GTA. Often I have buyers for these but whether I do or don't I usually contact the sellers to introduce myself for when they finally decide to use an agent.. Determining value and pricing real estate is a very fine art at the best of times but I can tell you that the rationale I hear from these owners in defence of their listing price is usually nothing short of comical. The mindset of a FSBO is oriented towards one thing - saving money. This mindset seems to absolutely prevent them from listing at anything less than what they feel is the best price for their property..Of course it's never correct to generalize and there may be odd exceptions but in my experience I would be willing to bet on it in most situations..
Flaw#3 .. I have read "Freakonomics" .. Statistics can be manipulated to show any result but the argument freakonomics presents is "average days on Market" .. An agent leaves their house on the market longer to get a better price... why?... Simple. Because someone who hires an agent to sell their house expects it not only to be sold for the top price - but also quickly. There is absolutely pressure on an agent to work FAST.As an agent, I have sold hundereds of properties and I have an inherent built-in patience towards my deal.. The only person who will be critical with my performance is me so if I turn down a lesser offer I understand why and I'm not criticizing myself as to why I couldn't have the offer improved... Take the example in the video: "I listed my house at 300k and got an offer for 290k which the agent told me take but if I waited another week I would have got 300k... Maybe. Its the agents job to assess risk, turning down an offer of 290k to hold out for 300k is a risky manouver.. There are costs associated with staying on the market longer including mortgage and tax payments.. A Realtor also has a duty to not only get the best price but also to actually sell the house, if a seller turns down 290k and it turns out there isn't another 300k offer waiting in the wings, the relationship between the agent and seller deteriorates as the seller wonders why the agent can't sell his house...Also, studies show that the longer a house sits on the market - the more it becomes "stigmatized" and the less its worth, so a quick sale usually means more dollars for the seller - not less... You've probably said it before yourself " Oh this propertys been on the market for 30 days so we should low-ball them.."
OK - Here's my final thought on what may actually be concieved as "COLLUSION AND DISCRIMINATION BY REALTORS" - and it goes like this:
The general public feels Realtors make too much money - The FSBO thinks that just because an agent met a buyer yesterday and brought him by the listing, he doesn't deserve the 5 figure paycheque he gets.. What the FSBO doesn't see is all the hours of education, marketing dollars, desk fees, association fees and general hard work that allowed the agent to be in a position to meet that client in the first place.. Realtors have to put up with a LOT of shit and the meager lifestyle that they have to live for many years of sustaining on just commision to get to the point where they can call themselves successful. These are the dues they pay to command that commission and when the general public feels like they don't deserve it - Realtors take it as a sign of disrespect.
Its pretty tough to do a business deal with someone who doesn't respect your profession or the money you make. How well do you think your dentist would look after your teeth if you told him that you thought he made too much money? I think the FSBOs attitude that he thinks a Realtor should work for free because it looks easy to him causes a general lack of enthousiasm amongst Realtors and that is why they don't work as hard to sellFSBO'S - and why should they?