Technically, there is no such thing as a "foreclosure" property. Foreclosure is a legal action.
Pre-foreclosure allows you to purchase a home just prior to foreclosure. It's a traditional sale between buyer and seller. Some pre-foreclosures are short sales but not every time.
A short sale enables the seller who owes more than their home is worth to sell for market value. These sales are "AS-IS" meaning the seller will not make repairs and unfortunately, they can a bad experience for both buyer and seller if the listing or selling agent is inexperienced. If you need to purchase a home by a specific date in the next 60 days, a short sale may not be right for you. Also, most sellers stopped making repairs long before they stopped paying the mortgage so most have deferred maintenance that will need to be addressed. FHA short sales will allow the lender to pay up to 1% of your closing costs as a buyer.
Short sales aren't typically bargains since the lender allowing the owner to sell at market value...not much below.
A Bank Owned (can be referred to as a REO, foreclosure, repo) can be any property owned by a "bank". FHA bank owned properties are called HUD homes and VA owned properties are simply referred to as VA. Most need work and the lender will NOT make repairs. For the right person, these can be a good deal however the right person has spare cash to make repairs immediately and overtime, has vision to see past dirt, grime, and debris. Also, financing can be tricky as the deferred maintenance make these homes ineligible for many first-time home buyer options.
In Charlotte, Bank owned properties are on the market for less than 90 days and sell for within 90-97% of their asking price with some selling far and beyond asking. They are hot items so be prepared to give away a lot to get the house you want.
The best option: A homeowner or builder willing to sell at today's values. Many sellers have gotten "real" with their pricing and as a result, they offer a home sold at a discount, make repairs, and the properties are in better condition.