This question comes up a lot with clients and I’d like to delve into the answer. A pre-foreclosure is where an owner has missed as little as one mortgage payment on a home, the bank can start the foreclosure process as they own the mortgage. This was especially relevant in distressed times like the recent Covid19 quarantine period when many homeowners lost their jobs and could no longer afford their mortgage. Most of these homes were not actually for sale.
Why do these homes appear to be for sale in Zillow?
The pre-foreclosure process is started as soon as a homeowner misses a mortgage payment. Unfortunately, that information is part of the public record (creepy huh?) and the legal notification that a mortgage payment has been missed can be used by Zillow and other home search portals as part of their advertising business model. The goal of advertising with these internet sites is to gain access to you, an interested buyer. We know a client that knocked on the door of a pre-foreclosed home where an irate homeowner hadn’t missed a payment. Instead, a mortgage refinance snafu had caused the process to start.
How do I find out if the home is actually for sale?
The quickest way to confirm whether a pre-foreclosed home is actually for sale is to cross-reference the home’s address on our home search portal to confirm it’s listed in the MLS. If a home is in a pre-foreclosure, distressed foreclosure or short sale status and available for viewing and sale we can definitely walk you through the process. Purchasing a distressed property generally requires patience, decisiveness and cash. If history repeats itself: each distressed home, sale process and procedure will be unique; plus you’ll be up against investors and house flippers looking to make a quick buck.
Rest easy knowing the Wilks Real Estate team can and will help you through any buying process.