Domain Realty founder Adam Wavrunek on the errors home buyers often make

Q: What are some common misconceptions people have when it comes to buying a home for the first time?

A: One of the misconceptions is about bank-owned properties. There’s this negative connotation associated with those types of sales. Some of those opinions may be accurate, but a distressed sale (pre-foreclosure or bank-owned) in a lot of ways is no different than any other real estate transaction.

In the case of a short sale or pre-foreclosure, the owner or home seller has lived in the property and is required to disclose any issues or problems. In many cases, the homes are well maintained and likely comparable to other traditional sales in the neighborhood. In the case of the sale of a bank-owned property, the bank never occupied the property, so they don’t know the issues, and they often don’t want to know.

First-time buyers need to make sure to have a full home inspection with a licensed inspector to go over any flaws or potential problems. But these sales are often a great opportunity to find a nice deal relative to other homes on the market.

One other misconception, especially with foreclosures and bank-owned homes, is that a lot of buyers think that because the bank lists something at a certain price, you can go in, make a low offer and buy it at 50 percent of what they’re asking.

Banks go through a lot of work. They hire an appraiser and a third-party broker, then compare multiple opinions and come up with a list price using factors like other sales in the area, the condition of property, etc.

Everything’s negotiable, of course, and we encourage that idea obviously because a lot of things can happen in negotiations. But remember, the foreclosure and short sale discount you’re getting is actually stemming from where the value was originally to where it is now. A lot of the focus for buyers is on the list price and not necessarily what the real value is, and that, ultimately, it what’s most important.