It is commonplace in my area for properties that are foreclosures (owned by the bank) to be priced under market value to encourage multiple bids and sell the property quickly. Also, some short sales that are lender-approved are priced below market value for the same reasons.
Pricing below market value in general means that the seller is highly motivated and wishes for a quick sell.
Hope this helps.
Prudential Connecticut Realty
Realtor, GRI, CSSN
John Hall & Associates
Many homes are listed low to stimulate activity, or at the "net" price a lender or investor is looking to get out of the property.
Bottomline is that whatever the price the property sells for, has to be within "market" value or it won't appraise. Cash is the exception to most rules though.
If you're looking to purchase a home in a particular area, it may be best to have a local realtor give you comp's for that market. That way if you're cruising the internet you'll be able to tell if it's too good to be true!