If you have spent any time on Zillow you have probably seen a too good to be true home listed as ”Pre-Foreclosure”. Here is what that label really means.
First: Pre-foreclosure homes are NOT for sale. In fact, sometimes owners don’t even know their properties are listed as such, and there are cases where homes are listed incorrectly as pre-foreclosure.
What is Pre-Foreclosure?
Most often, homes listed as “pre-foreclosures” on Zillow are properties where the lender has initiated foreclosure proceedings because the owners are behind on their mortgage payments. This does not mean that the home will definitely be foreclosed upon or that it will come on the market any time soon. It simply means they are behind on their payments.
The pre-foreclosure stage can yield some good deals, but most experts agree it’s the most difficult stage during which to purchase a distressed home.
The pre-foreclosure stage is the period between the time in which a Notice of Default (in nonjudicial foreclosure) or lis pendens (in judicial foreclosure) has been issued to the homeowner and after the property is sold at a foreclosure auction.
The owner may be working to cure the default. If they succeed in paying their missed mortgage payments, then their property is no longer in pre foreclosure. Many people find a way to make this happen. Therefore, it is not by any means certain that because a home is listed as pre foreclosure, it will ever actually be foreclosed on.
The Basic Foreclosure Process
The foreclosure process can become lengthy depending on factors such as the location of the home, and the specific situation of the homeowner. Therefore, every foreclosure follows a slightly different timeline, but everyone goes through roughly the same scenario.
Missed Payments > Public Notice > Pre-Foreclosure > Repayment Plan/Options > Failure to pay > Auction > Post Foreclosure.
As you can tell from the overview of the foreclosure process above, homes that are in pre foreclosure are not actually for sale. There are many steps and actions that can be taken by the homeowner of a pre foreclosure property to remove it from the foreclosure process entirely. Meaning that it potentially never will be for sale.
Are they worth it?
Well, if you ask me, no. Most of the time you see these homes on Zillow it is more frustrating for potential buyers than helpful. Especially because in my experience, Zillow has a history of displaying inaccurate information. Zillow advertises these homes hoping you will click “request more information” and then it captures your contact information and sells it to real estate agents. That seems to be the real reason why they even post this information. If you are looking to buy foreclosure properties there are better and more reliable resources available.
About Jaleesa Peluso, Laguna Beach Realtor & Certified International Property Specialist
Jaleesa and her team specialize in representing local as well as foreign buyers and sellers of Orange County real estate. Are you considering leasing, buying or selling your Orange County home? Call us now at (949)395-0960!