Important thing to remember is that most lenders have zero clue on market value. They do loans, but they are not in the field every day buying and selling homes. They can make sure the contract looks ok but they will not know if the price on that contract is good or bad.
I understand that many people think agents are paid too much or can be worked around, but their market knowledge, if they are a true professional with years of experience, cannot be disregarded as being unimportant.
Thats a really good point. The company we did our fsbo with sent us a list of all similar homes that were currently for sale, had sale pending or were sold in the last year in our home. It was everything from about 80% of what we planned to list at to 120% of what we planned to list at. With that information, we were able to feel very comfortable with what we planned to list it at. We could have hired an appraiser to get a better ides of market value as well. As it turns out, I can point to about $6000 dollars in savings for our sale and purchase of a home because we went fsbo and didn't have an agent. The home we are selling isn't very high priced and I'm 100% confident that we didn't underprice our home by near that amount.
We found that Zillow is pretty handy to do some rudimentary market research on your own as well by analyzing past sales.
Nothing is probably better than a good agent who prides themselves on doing really good work. However, if you're working with an agent, that entire commission doens't go to them, the company they work for is going to get part of it. So if both the buyer and seller have an agent, the commission for the selling agent is about 3.5%. If they sell a house for $250,000 or for $200,000, the difference in take home pay for that agent is probably on a few hundred dollars, so you'd probably want to make sure you get a good recommendation on an agent because there might not be a huge incentive for them to get you your top dollar.
When buying, an agent can get you information on homes being listed for sale a day or 2 quicker than you might find if you are searching by yourself. That is a benefit too.
I've never had a bad experience with an agent, though. I bought my first home with agent and he was great. The agent our buyer is using is fantastic as well. I would definitely recommend both of them to anyone looking for an agent.