A Few Definitions

How to know the value?
Short Sale,
Foreclosure,
REO:
They are everywhere today in the real estate market:
distinct categories of homes that are in the process of "changing ownership" due to all the extenuating circustances of NOW.
The Short Sale seller hopes to sell the home before the bank or courts move in. The "short sale" refers to the hope the bank or banks will settle for less than the full amount owed on property.
If this does not yield good results the property will go to auction at foreclosure proceedings. This is what takes place on the courthouse steps of the local county.
At the auction all bidders are welcome as long as CASH comes with them. Among others, there are investors working the market who show up with bundles of cashiers checks to put down toward any winning bid.
As a last resort, the bank owns the property ON THEIR OWN and now the property is an REO:
Real Estate Owned.
This may be the most advantageous position for a buyer. Banks do not want to own the property. They are more highly motivated to negotiated with an appropriate buyer at this time.