Hi Jaime and thanks for your question.
Here in San Jose, a Trustee's sale (which is the auction of the property in default) is held at the courthouse steps and the highest bidder will take possession of the home. Usually, there are public records available to show show interested parties the minimum acceptable bid. If the bid is low enough, there may be someone who actually bids on the property, but often if the home is worth less than the mortgage, then the home reverts to the first mortgage holder--the bank.
Once the home is sold, as another real estate professional said, it might take anywhere from a few weeks to a few months for the home to go back on the market. Interestingly enough, many of the banks seem to be "holding" their foreclosure properties in the hopes that the values will increase this spring and summer, so many of the homes here in Santa Clara County, for example, were foreclosed in December and have yet to hit the market.
There is no guarantee that the individual who listed the home as a short sale (or preforeclosure) will be given the listing again when the home is finally set up for sale by the bank. In many cases, the property is turned over to an asset manager who then solicits an agent from their "pool" of available agents. The one who contacts the asset manager first often gets the list.
Good luck to you, and I hope this answered your question. If you would like more information about a specific foreclosure property, contact your real estate professional who can obtain information about the property from any number of databases or from the title company. Happy house hunting!!
Grace Morioka, SRES, e-Pro
Area Pro Realty