The firm said 26 percent of home sales involved homes owned by banks or with mortgages in distress. The figure is a climb from 22 percent in the fourth quarter of 2011 and up from 25 percent in the first quarter of 2011.
The average sales price of a home in foreclosure or bank owned was $161,214 in the first quarter, down 1 percent from the fourth quarter and down 2 percent from the first quarter a year earlier.
The average sales price, however, was 27 percent below the price of a home not owned by a bank or with a mortgage not in trouble in the first quarter.
"Foreclosure-related sales picked up in the first quarter, particularly pre-foreclosure sales where a distressed homeowner is selling to avoid foreclosure -- typically via short sale," said Brandon Moore, chief executive officer of RealtyTrac.
In a short sale, the owner sells the home for less than what is owed on the property.
"Those pre-foreclosure sales hit a three-year high in the first quarter even as the average pre-foreclosure sales price dropped to a record low for our report. Lenders are approving more aggressively priced short sales, which in turn is resulting in more successful short sale transactions," he said.