Yes, definitely try to sell on your own, especially if your in-laws aren't super rushed to sell. Actually, even if they are, there's no harm to DIY - because of the amount of $ you can save. (Assuming the 1 br+den yaletown condo is ~$500K @~1.5%... Seller Realtor's Commission to be saved = $7,500!)
I think giving a buyer agent more incentive is great - you can also use that as a 'carrot' to nudge the buyer realtor to convince their buyer to pay more when it comes time to negotiate price. "Well Ms. Buyer Agent, I am having to provide a more generous commission to you than what's usually being offered. So, it will be hard for me to take more off the price... oh btw you should let your clients know that I am anticipating more offers soon..."This is of course quite unethical, but you know Realtors pull this all the time in order to benefit their own commissions. So why not play by their 'rules' (aka dirty tricks)?
You can try pricing a bit below Market Value, but don't expect crazy bidding wars like houses. Unless the condo is a rare find (ie: not many other cookie cutters just like it on the market - unique view/amenities/location etc.), you will more likely see low ball offers below asking.
Keep in mind too that even though your in laws aren't in a rush to sell, being on the market "too long" also gives the listing a bad stigma.
I would also consider a few of the steps below (some drawn from my own personal experience):
1 - Post a notice in the message board at the lobby of the building before you list it on MLS. For example: "An 02 unit in this building is about to be available for sale. If you are interested, feel free to contact xxx-xxx-xxxx." This way, you may even be able to stir up some interests beforehand. If you're lucky to find a buyer, you can even save on the Buyer's Realtor's commission. They will most likely ask you to share some of the commissions savings, but at least you each get to pocket a few extra grand. After a week, you should be able to see if this has worked or not. As an extra step, you can also post it on Craigslist. Even though the chance of getting a buyer through CL is pretty low because most buyers usually have realtors since they're "free" for them, it's still worth a try. A few clicks to copy & paste and save a few grand, why not?
2 - If #1 doesn't work, posting on MLS is a MUST. But BE CAREFUL who you choose to post for you for a flat fee. I have had friends who used individual realtors who do the small flat fee posting thing on MLS, only to find out that the agents actually ended up POCKETING buyers for themselves. They will tell the buyers/agents who call that the place already has an accepted offer and not forward the buyer contacts to the sellers.
I think the FSBO companies like Property Guys and comFree are more trustworthy since they are trying to promote the whole FSBO concept. Unfortunately there seems to be some reluctance from the BCREA to let them operate properly in Vancouver and do flat fee listing services on their MLS.
If you do have to go with an agent to do a flat fee listing, a good test is to ask these agents which of their current listings are flat fee listings, then get someone else to call them and see if they will actually pass on the prospective buyer contacts and speak to the actual owners. The time costs more than the actual money in this case - a few hundred vs wasting weeks being "on the market" where potential buyers fall into a black hole.
From my personal experience DIY'ing, I still find that it's best to use someone who has access to actual MLS data because you do need data of recently sold units to help price your unit initially and monitor sales activity after you post. If you have a personal friend who is a Realtor that you can trust, try to negotiate a flat fee with them say $1000 or $2000 JUST for posting, passing on buyer contacts and looking up comparables for you. Especially if they are a somewhat busy agent, they should be happy to make a guaranteed small amount for some copy and pasting work. This way, at least you can trust them to pass on the contacts AND you get the data. When my friend helped me using this method, I did have to pay an extra $1000 of brokerage fees to his brokerage (Homeland Realty) - so I'm not sure how much the other RE brokerages will charge on this.
Lastly, there are many real estate lawyers that can help draft up contracts for a few hundred bucks if you are lucky enough to find a buyer without an agent. But if they have an agent, this becomes moot since they will just use the standard Realtor cookie cutter contract of purchase and sale form to submit their offer. In that case, all you have to do is cross out stuff, initial and sign.
P.S. I will be very interested to see how this works out for you. It's been a few years since I sold my last place on my own and I am looking to sell again soon. Want to see if my tips above will still apply in today's market.