With the number of short sales increasing and even outnumbering REO sales in certain states, experts are speculating short sales might become key to preventing an even greater swelling of foreclosed properties on the market.

Compared to a year ago in January 2012, pre-foreclosure sales, which are typically short sales, increased 33 percent, according to a RealtyTrac report released Thursday.

Short sales even outpaced bank-owned REO sales in 12 states, including Utah, California, Arizona, Florida, Indiana, Colorado, New York and New Jersey.

Also, 32 states saw annual increases in pre-foreclosure sales, with the top five being Georgia (+113 percent), Michigan (+90 percent), Wisconsin (+77 percent), South Carolina (+76 percent) and Utah (+70 percent).

Despite the increase, Daren Blomquist, VP of RealtyTrac and author of the report, points out that short sales have declined on a long-term basis, but January’s report could signal a turning point.

“Short sales have long held great promise as a market-based solution to the nation’s foreclosure problem, but short sales transactions over the past three years have actually declined after peaking in the first quarter of 2009,” said Blomquist. “January foreclosure sales numbers, along with first quarter foreclosure activity, strongly indicate that downward trend is ending, and we believe 2012 could be a record year for short sales.”

Average pre-foreclosure prices saw a decline, according to the report, with the average sales price in January at $174,120, down 10 percent from January 2011. This, RealtyTrac stated, shows that lenders are more willing to approve more aggressively priced short sales.

In January, a home sold via short sale sold at a 21 percent discount on average compared to the average price of a home not in foreclosure, according to RealtyTrac.

The five states with the biggest discounts were Massachusetts (40.86 percent), Missouri (35.5 percent) California (29.93), Indiana (29.82), and Georgia (29.31).

The five metropolitan areas with the greatest discounts were Kansas City (56.53 percent), Louisville/Jefferson County (44.25 percent), Milwaukee-Waukesha-West Allis (43.64 percent), Boston-Cambridge-Quincy (41.57 percent), and Indianapolis-Carmel (37.26 percent).

The time it took to approve of a short sale was a bit lower for the 2012 first quarter, averaging 306 days, down from 308 days in the fourth quarter of 2011 and down from a peak of 318 days in the third quarter of 2011. The short sale timeline begins when a property starts the foreclosure process to when it’s sold as a pre-foreclosure.

However, the average time to sell a pre-foreclosure has actually tripled since the first quarter of 2007, when it took an average of 113 days.

There’s nothing short about short sales. If you can survive that process and make that happen it’s going to be a better outcome for everyone, said RealtyTrac VP Charlie Engel during a broadcast hosted by the Charfen Institute for Certified Distressed Property Experts.

Recently, Bank of America and GSEs Fannie Mae and Freddie Mac announced efforts to streamline the short sale process. BofA’s change requires a decision on a short sale in less than 3 weeks.

Starting in June, the GSEs are requiring servicers to make a decision on a short sale within 30 days of receiving an offer or an application package from a borrower; if more time is needed, a servicer must provide the borrower with a weekly update and come to a decision no later than 60 days.

With foreclosure starts – either default notices or scheduled foreclosure auctions – numbering more than 100,000 in March, this means more opportunities for short sales, according to the report.

Compared to the month before, March foreclosure starts increased 7 percent, but were down 11 percent from a year ago. When looking at individual states, 31 posted monthly gains in foreclosure starts in March.

Other properties with potential to become short sales are delinquent loans, which represented approximately 3.5 million properties, according to a fourth quarter 2011 survey from the Mortgage Bankers Association.

RealtyTrac is an online marketplace of foreclosure properties, with more than 1.3 million default, auction and bank-owned listings from over 2,200 U.S. counties, along with detailed property, loan and home sales data.

Thank you to Tony Collins at PrimeLending for sharing!

Buying a home is an exhilarating experience. Walking into your new home, turning on the television, making a phone call, connecting online with your friends and lighting the gas range makes your purchase even more satisfying. And you didn’t have to do much at all to connect all these services. OneSource did that for you. And it’s free. That’s right, at no charge to you!

I’m so excited about the programs John Leach offers at OneSource to help my buyers settle into their new homes with a minimum of disruption. He streamlines the activation process for utilities, phone services, Internet, television services, alarm systems, newspaper delivery and mail change of address so that my clients move into their new homes with a sense of calm and completion. Now they have time to settle in, unpack, cook dinner (gas and electric are already connected) and enjoy the landscape.

Here’s how it works. Before you move, we’ll make a list of all services you want transferred and those you want to add. I’ll send that list, with your chosen start up date, to OneSource. Their consultants will contact providers for you and submit the change orders. Their services don’t stop there. They will follow each order through completion so you have no surprises at your new home. Everything works.

OneSource services are valuable for both my local clients and those moving here from a different part of the country. No longer do you have to make lists, try to find the right phone number, research adding a different provider if you are unsatisfied with your current one. No more comparison spreadsheets, hours spent on the phone trying in vain to talk with someone who will actually help you.

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As you plan to buy a home, add OneSource services to you to-do list. It just makes sense.

Company Description for Grant Hickman Real Estate Advisors: 

Real Estate Company Owner (Small Business/Entrepreneur), currently four agents, will grow to about six-10 agents within the next six-24 months. Currently closes about 50 homes per year, looking to jump to 70-100 closing per year. Desire to take my company to the next level by implementing  true plug and play real estate technologies, paper reduction technologies (contracts), and cloud computing for entire company. Accessible anywhere, any platform, any devices (preferably iphone/ipad/laptop/iMac)

Functionality/Concept:

To create an Intranet/Cloud site for agents of the Grant Hickman Team. This site will be designed for each agent to have a customizable page that will allow them to get to the following:

- Document Manager (Version Control, page level)
- Calendar (Company/Agent)
- Contact Manager (Agent)
- Task Manager (Company/Agent)
- Discussion Forums
- Company Announcements
- Partner Directory
- Email (Agent)
- Company Stats/Goals/Graphs
- Opinion Polls
- Helpful Links/Websites (3rd Party service websites)
- Instant Messaging

Technologies/Platforms: 
- Google Apps
- Google +
- Cloud Technologies
- iPads
- iPhones
- Cloud Print (Google)

Sites Controls: 
- Public vs Private
- Shared Pages
- Agent Only Pages (Page Level Permissions)

Time Frame: 
- Looking to start this project as soon as possible, with a 1-3 month timeline

Point of Contact: 
- Grant Hickman (Mobile 314-265-1531
- NOTE: We will also have a resource with a Google Apps Provider based in California