Are you planing on staying in the home? If you wait till the Bank lists the Home ( May be months) you may have to move out after the Current Owner is not the Owner anymore. Like the other answers said you should think about buying the home now in the short sale process and may not have to move. Consult a local Realtor.
It's "open season". If you are interested in buying this home you need to make an offer on the short sale. The purpose of a short sale is to sell the house before the foreclosure process is completed. So, if you wait someone else will buy the home.
It is unlikely that there is any advantage in being the current tenant. The best and highest offer will win.
Lynn is right on target with her information. If this is the direction you wish to go your best bet is to persue it now. There is too much possible inconvenience and risk involved with waiting for a foreclosure.
In order submit an offer you need lender approval statement then work with realtor who represents you.
You do not have any advantage as the renter. Short sales can take months, I've seen it take up to two years. If you like the property you can always make an offer after getting a comprehensive market data from your real estate agent. I recommend attending a home buyer class. If you are buying in Englewood or surrounding area, they hold them monthly. The next one is on March 18th, see link below. Then get prequalified and evaluate whether or not you wish to pursue it. Just be forewarned, short sales are frustrating both as the buyer and seller, be prepared for delays and know the difference between FHA and non-FHA short sales.
One thing that no one mentioned below was to ensure that when you make an offer on this home that your agent does a complete CMA (Comparative Market Analysis). Sometimes the seller will price the home at price that is higher than market value to help recoup what is owed. Just make sure that when you make your offer that you take the current market in consideration! I have a brief read about short sales and foreclosures if you would like to know a little bit more information about them. Go to: http://www2.topproducerwebsite.com/users/29982/downloads/Rea
Let me know if you have any questions!