Buyers do their own CMA
When selling by-owner and buyers do their own CMA, comparitative market analysis, do not be intimidated. Unless they live locally, you have a much better handle on local homes than they do. With the increase in informed buyers and the use of buyers’ agents, a buyer's CMA is not uncommon in a home sale.
Since this is your neighborhood, you have several advantages. The buyers will likely know nothing outside of what the printed report states and their agent (if they have one) will probably not be as knowledgeable about the local housing market as you.
If a house like yours (style, bedrooms, size, etc.) hasn’t sold lately, point this out.
Also, comparisons provided by the buyers or their agent usually won't include by-owner properties.
Find out as much as you can about local FSBO houses that sold. Others will have nothing to refute the information you provide. If you need to further drive home a point about a local house being compared to yours, simply ask, “Have you ever been inside that house?”
Proceed to tell them why it sold so low: the poor condition, interior decor in serious need of an expensive makeover, builder-grade cabinetry, etc.
Moreover, if your home is priced higher than the other property, you really should be selling the buyers on why your home deserves a higher price. You’ll need to emphasize your positives–newer kitchen, better grade cabinets, finished basement, etc.
Knocking off the commission:
Some buyers assume that a seller pockets a 6 percent commission when selling by-owner. So they reduce their offer by at least this much.
Ask them how they arrived at their offering price. If they admit that they reduced their offer because you are selling by-owner, they’ll let you know. It’s their way of justifying their lower offer. Point out how you’ve been doing the marketing of the home; the functions of the listing agent, in order to not have to pay the "listing side" of the commission.
If you have correctly priced your home close to the expected selling price, advise the buyers that you have priced your home below the recommended asking price in order to get a faster sale.
How can they argue against this? After all, they are the ones interested in your home. They obviously see value, which is tied directly to your asking price. They probably knew the asking price before they even saw the inside of your home.
If you are confident that you’re offering a good deal at the start, you’ll attract buyers and you won’t have to move very far off of your price. More on NEGOTIATION PROBLEMS