Pre-foreclosure is the first stage of the foreclosure process in which a homeowner
has defaulted on his or her mortgage payments, but still has the opportunity to stop
the foreclosure by catching up on defaulted payments or paying off the entire loan balance —
usually by refinancing or selling the property. Homeowners in pre-foreclosure are often motivated
sellers who want to avoid losing their property at public auction.
A public foreclosure auction occurs if a homeowner in default does not stop foreclosure
proceedings during the pre-foreclosure period. Properties are typically auctioned off
in a public location, such as the local county courthouse, by an attorney or local public
official. Auctions can be great opportunities to buy property below market value, but usually
don’t allow for property inspections and often require a lot of cash depending on the auction
process in your area.
A property becomes a full-fledged foreclosure when it is repossessed by the foreclosing
lender, who can take possession either through what’s called a died-in-lieu-of-foreclosure
agreement with the owner during the pre-foreclosure period or through a winning bid at the
public auction. Foreclosing lenders are often motivated to sell bank-owned properties (also known as REOs)
quickly because they are non-performing assets.
Better Homes and Gardens Real Estate Mason-McDuffie, founded in 1887, and its affiliates are licensed real estate brokers in California and Nevada.
Zillow.com, Zillow, and Zestimate are registered trademarks or trademarks of Zillow, Inc. © Zillow, Inc, and suppliers. Any
use of Zillow tools is subject to their general Term of Use. What's a Zestimate? Visit Zillow!
©2013 Better Homes and Gardens® is a registered trademark of Meredith Corporation licensed to Better Homes and Gardens Real
Estate LLC. Mason-McDuffie Real Estate is an independently owned and operated franchise of Better Homes and Gardens Real
Estate LLC. All property information is deemed reliable but not guaranteed. It is illegal to discriminate against any
person because of race, color, religion, sex, handicap, family status, or national origin. Equal Housing Opportunity.