What the Heck Does "Pre-Foreclosure" Mean on Zillow?

Zillow has a reputation for not being accurate and their "pre-foreclosures" are part of the problem. I get asked about these all the time by buyers. This home is not for sale. It is labeled as being in the process of foreclosure, but it is not a foreclosed property yet.

When someone stops paying their mortgage, the bank usually will threaten foreclosure after about 3 or 4 missed payments. Once this happens they schedule the property to go to auction at the courthouse. This auction is called the "sheriff's sale". Once the auction is scheduled, it must be printed in financial reports that are public record. Zillow claims they get this information from these financial reports.

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