Patience is the most important criteria for a buyer. I have a DOZEN buyers who are looking at short sales and REO's and I tell them, with an FHA loan the stars have to align properly in order to get a home in an area like San Ramon. Many times it means passing up the new inventory (where multiple offers occur on the best homes) and waiting a reasonable amount of time until you can find an unreasonable seller who is about ready to come to his senses.
There are other options but they might not work for you. If you are interested in a consultation, I'll buy you a coffee over an initial discussion with no obligation.
The biggest challenge is the lack of available inventory in your price point. We have a series of institutions managing the real estate market and the best of the best buyers get moved to the front of the line (sadly). I'd love to help