Pre-Foreclosure means that the owner is behind in their mortgage payments, maybe they've already received a Notice of Default (which usually means they're at least 3-4mos behind)
The home is heading Towards a total foreclosure, but isn't quite there yet. The owner CAN (with the help of a Realtor) do a SHORT SALE, in which the Realtor negotiates with the bank to have them Accept LESS than what was originally owed.
The only thing SHORT about this sale is the amount the bank is making back on their original investment. To buy a Short Sale & close escrow can take as much as 90 days. If you're considering buying a Pre-Foreclosure property it is IMPERATIVE that you are working with an agent who is EXPERIENCED in doing Short Sales. It's a very difficult process & most agents DO NOT WANT to handle these sales because it requires Much more work & they get paid less!... more