@Account Closed, I agree with you that foreclosure is a process beginning when the homeowner defaults and continuing until the lender has sold the asset. It is also true most of the general population makes no distinction of what step the property is currently in. However, especially among investors and on BP, I find it very helpful to use terms that make it apparent what type of property you are talking about. The strategies employed to invest in the property differ vastly depending on the phase of the process the property is in.
Traditionally, there were two points in the process in which an investor could acquire the property, either when it was auctioned on the courthouse steps or after the bank had regained title and sold the property on the open market. Creative investors then realized that purchasing the property from the homeowner before the lender regained possession was often a good option, through a short sale arrangement, assignment, etc. Because of the huge differences in purchasing the property depending on the stage it is in, such as ability to finance, ability to inspect, occupied or not, etc., I wish we would use better terms to avoid confusion and wasted time.
IMHO, I think "pre-foreclosure" should be used from the time the homeowner starts having trouble making their payments until the time they loose possession. "Foreclosure" works well for the auction itself, and after the lender has regained possession, "REO." That said, I realize that I can't make the world conform to my desires and I will continue to occasionally waste time looking at properties or reading ads for properties described as a "foreclosure" that don't meet my criteria.
