Zillow, a third-party real estate site, has a search feature called Pre-Foreclosure listings. These listings are causing a great deal of frustration, confusion, and disappointment for both home buyers and real estate agents.
Pre-Foreclosures on Zillow
The problem is most of these homes are not actually for sale and may never be for sale. Most Pre-Foreclosure homes are just properties where the lender has initiated foreclosure proceedings because the owners are behind on their mortgage payments.
Zillow states here in their own article “Buying a Pre-Foreclosure Property” that the owner may be working to clear the default and that it’s not uncommon for homeowners to resolve their financial problems. As well, Zillow has published disclaimers on their site saying: “Be aware that a home listed under the pre-foreclosure category is a home that is not necessarily for sale.”
Some of these listings are in foreclosure, but this doesn’t mean the home is for sale or even ever will be. In the unlikely event they end up eventually being for sale, it would be a long time before they went on the market, as the foreclosure process in Massachusetts typically takes over a year. Likely even longer at the current time with the Covid related foreclosure halt since March 2020. The fact is the owners of these homes often aren’t even aware their home is being featured as one of Zillow’s Pre-Foreclosure listings.
Once an official notice from a lender has been served to a homeowner, Zillow pulls the public record, posts a Google street view image of the home, the address, and some details about the property. The homeowner is not allowed to opt-out of having their home publicly listed.
Many home buyers incorrectly assume that because the Pre-Foreclosure homes are listed alongside traditional listings pulled from MLS, that they must be for sale and available for showings. Consequently, many real estate agents are frustrated by Pre-Foreclosure listings as well.
The historically low inventory of homes due to the pandemic has prompted home buyers to search for Pre-Foreclosure listings as an alternative option to regular listings, as competition for traditionally listed homes is higher than ever. Since so many listings show up in the search results, buyers mistakenly believe the Pre-Foreclosed properties are also for sale. Often, when they contact their buyer’s agent to schedule a showing for these Pre-Foreclosure homes, they don’t believe agents when they say the homes are not for sale.
Inman stated in this article:
“The problem is that listings do not start with Zillow, RealtyTrac or even Realtor.com! The source of all listing data begins with the local MLS. If the MLS does not have the listing, then the property is not for sale – not even a bank-owned home, because banks also list homes through the MLS. But buyers don’t always understand that, and so they waste a lot of time thinking about properties that are not on the market.”
We’ve received a lot of feedback from our buyer’s agents and from agents outside our company and they agree they are seeing this happen with buyers more and more.
We advise home buyers that the best way to use Zillow is to select the red For Sale option when searching, as this will only show homes that are actually for sale. They should not select the blue Pre-Foreclosure option when searching. If a home is for sale it will show up — even if it is a foreclosure — when you select the red For Sale option. This way you can be sure you are not missing out on any homes on the market.
We pulled sample data on homes across the state to see which Pre-Foreclosure listings are actually for sale. As you can see, most of these listings are not for sale, are not listed on MLS and most likely will never go on the market. Homes on this list that actually are for sale will show up when you select the red For Sale option when searching on Zillow or in a direct MLS feed. The best way to avoid disappointment is to avoid searching Pre-Foreclosure listings altogether. That way you will not miss out on anything.
To hear a more in-depth explanation from Anthony, click here.
How Do I Get the Most Up to Date Data?
Buyers should use our Home Buyer Advantage Program.
Many homebuyers don’t realize that third-party aggregator websites like Zillow and Trulia actually get their listings from many different sources, not always from a direct MLS feed like our Home Buyer Advantage Program.
Because of this, these third-party sites often have duplicate listings, out-of-date, and even incorrect information. We see it all the time: a buyer wants to schedule a showing for a home listed on one of these sites and the home has already sold, is under contract, or was taken off the market. This causes frustration for the buyer who must now start their search all over again.
Unlike third-party sites, our Home Buyer Advantage Program gets updated listing information straight from MLS every 15 minutes and it will alert you to new homes as they become available on the market free of charge.
If you are a home buyer and you are feeling frustrated with your home search, don’t be fooled into thinking that Zillow’s Pre-Foreclosure list has any additional homes that you can buy. Inventory is historically low right now due to the pandemic throwing off supply and demand. Be patient because the right home will most likely come on the market in the coming months.