There is a house in my neighborhood that is listed with one of these companies, it's been on the market for several weeks now. The sign in front is "For Sale By Owner" simple sign, there is one on the main road that says the same, he is listed on the MLS and will be paying 3% to the buyers agent.

He has to take all the calls for showings and is not available to show until after 6:00 in the evening and on weekends. This limits the amount of showings considerably. This is a new subdivision with contruction still going on. The builders are making fantastic deals to get buyers, deals that this seller may not be able to compete with!
 
Is he aware of everything that is going on in this market? He has a full time job how much time do you think he has to keep up with all the back ground research it takes? Who is making sure that the "Buyer" who calls is really a buyer? Have they been preapproved for a loan?  What kind of Marketing is this Brokerage doing to sell the house?

If someone calls and says they want to come see the house, does he just open the door? Not to mention the financial part of selling a house but how about the safety issues!!

There is a reason it is so cheap, to lure you in, but be aware of all your options before you make your choice, interview some Realtors before you decide. It will cost you nothing to check it all out first.

Another thing that you might not think of is that FSBO makes a statement to buyers that the seller is not willing to pay for an agent, it also might put the thought in the buyers head that if they can't afford an agent they might not have been able to afford to keep the house up either...something to think about!