Pre-foreclosure is the period after a borrower falls seriously behind on mortgage payments but before the lender completes a foreclosure sale, during which the borrower still owns the property and has options such as a sale, a loan modification, or a short sale. Those options end once the foreclosure sale happens.
Why it matters
Every option you have to sell on your own terms exists only during this window, before a trustee's sale is scheduled and held.
General information, not legal or tax advice.