These kind of homes are sold by individuals as a normal sale. That is because it is a sale by one person to another person with no banks, or short sale contingencies are involved.
When an individual cannot pay the mortgage as agreed, and falls behind on payment, he or she can let the bank know that he is not able to pay the regular installment in full. If the individual decides that he/she does not want to or cannot afford to stay in the house and make payments, with the bank’s permission he/she can put the property for sale. It is with a contingency that the bank will try to get the most on the property to recover the shortage on the loan amount. That is why it is called a Short Sale.
When an individual cannot pay the mortgage as agreed, and falls behind on payment, he or she can let the bank know that he is not able to pay the regular installment in full. Early stages of foreclosure process is called Pre-Foreclosure. At this stage the owner has tried everything to either sell the property on an open market or via short sale but could not sell it for whatever reason, then the bank gives him/her an opportunity to do a loan modification under programs such as HAMP. After failing all if nothing works out then the bank proceeds to foreclose on the property. This stage is Pre-Foreclosure. At this point one can buy the property at an inexpensive price. Call for more info as how to go about buying it.