Usually the prices you see that are too low to be true, is the default amount. Sometimes, the default amount is corrected but if not, the bank holds an auction. At this point, you can make a bid for it but you'll be competing with some hard core investors with pockets full of cash. I advise you go to some of them just as an observer to get an idea of what you are up against.
The best option, however, is to work with a Realtor who can assist you in finding a home that meets your needs. MOST homes on the market at this time are REOs or Short Sales anyways. Good luck :)