The owner had tried to sell many times prior but didn't reduce his price fast enough at the right time to avoid short sale, hence the now, listing price of $400K.
Let me know if you'd like me to get more information, see where the deal is at right now, if the current buyer is sticking with it, find out who the banks are, maybe you could be the primary back up buyer.
I can't answer specifically about that particular house, but I can tell you the reason most homes stay on the market too long and that is price. If the price looks good to you, I would recommend that you contact an excellent Realtor to take a look at the property for you. We are trained to see "red flags" and to protect you from getting into problems with Real Estate.
Best of Luck to you