Not all homes that go into default go all the way through foreclosure. Many sell before the notice of default is finalized. Many home buyers and real estate investors are attracted to short sales and foreclosures because they want to buy a home for less than the market value. Often sellers in default and buyers who want a short sale or foreclosure can see eye-to-eye and enter into a profitable transaction for both parties.
Distressed home sales can be complicated and the seller does have rights when in foreclosure. Both sellers and buyers should seek legal advice before entering into such a contract.
Short sales happen when a lender agrees to accept less than the amount owed against the home because there is not enough equity to sell and pay all costs of sale. Not all lenders will negotiate a short sale, and that is why a real estate agent can be a tremendous help by contacting the lender to determine your options.