1) Search for homes

Do a search on RealtyStore.com using Advanced Search, selecting Pre-Foreclosure (Lis Pendens) and Pre-Foreclosure (NOD) checkboxes in your search criteria.

2) Work with a Buyer Agent

Select a Preferred Partner from those listed in the Property Summary page, and let them know that you're interested in this property.

3) Contact the Owner

With the Buyer Agent's (Preferred Partner's) help, contact the owner of the home and let them know you're looking for a home in that area.

NOTE:
Be tactful. The owner of the home may not yet have decided how he/she intends to resolve the Pre-Foreclosure situation - whether they'll be selling, catching up on their payments, renting the property out, engaging a Short Sale, etc.

4) If the owner will consider selling, make an offer

The offer can be a lot lower than the original loan amount, but should be within a $25,000 range of the current appraisal of the property. You can hire your own vendor to conduct an appraisal, or see the Value Range listed on the Property Summary page. Understand that the owner's lending bank will be the deciding factor whether or not your offer will be accepted. But also know that the owner has the right to reject your offer if they feel it is too low as well. If you make an offer for $250,000 they can ask the bank to approve your offer, but if the home is appraising at $300,000, the bank is likely to reject it.

5) Keep trying

If your offer is rejected, you can make another higher offer. Do not waste time making offers of $1000 increase more each time. This will waste time, and you may lose the sale. Make a fair-market offer, based on what the property is actually worth in today's market.

Remember:
Homes are appraising for MUCH LESS than what most owners have paid for the homes. Owners are "Upside Down" in their loans and this forces them to Short Sell. A Fair Market Offer still means you are getting a FANTASTIC Deal and saving HUGE amounts of money! If the home is appraising at $300,000, the bank will likely take close to that. Once your offer is accepted by the bank as well, you should be able to close on the home within 30 days if your finances are in order.

Do not waste your time making an offer that is way lower than the short sale listing price. (As in offering $100,000 for a listing of $200,000). Even if the seller submits the offer for bank approval, the bank is under a legal obligation to obtain a fair market value for the price of the home, otherwise the bank can be held liable for the difference. Therefore, short sales are not a "buy it for nothing" deal. But you can still negotiate an awesome deal for much less than the buyer paid.

Understand that short sales are granted by banks when the seller has a hardship reason. Since the seller is in a tight bind and fighting off foreclosure, he can still be held responsible to the bank for the difference in the sale price and the unpaid amount on the original loan. Sellers generally will not entertain pennies on the dollar offers.

Many banks will not even respond to your offer if the price is too low. They are simply overwhelmed with offers on properties and do not have the time to respond if they feel the offer is not viable.
If you have not heard back from the seller regarding their bank approval in two weeks, it is safe to assume that the bank has not even entertained your offer and you can resubmit a higher offer at that time.