Run from pre-foreclosure homes unless you have tons of time to wait! Here's another little "trick" I fell into. The house we wanted was listed high, at EXACTLY what it would have taken to satisfy the bank with $0 to the seller and even a reduced commission to the seller's agent. So, there was nothing about it being a pre-foreclosure (short) sale in the listing. We offered $30,000 below the asking price of $315k and it was accepted...but that put it into the Short Sale category and, after waiting for Saxon Bank to respond to our offer for 5 weeks after they received all required documentation from the seller/builder, they finally told the escrow company that it would be at least another 5 weeks before they would make a decision (whether or not to forgive $25,500 needed). We walked away at that point and found a better deal.
I say all that to note that they have now returned the house to the market with the very same tactic: listed at a too-high price that prevents them from having to disclose up front that it is a short sale, hoping to get someone else to love the house and then wait. We passed up looking at ALL (identified) short sale listings as the banks just do not seem to be in a hurry to deal with a live buyer...Saxon, it appears, would rather just go thru the foreclosure process. The escrow company reported they were just plain rude to them when they were trying to get an idea as to when escrow could proceed.