Foreclosure Auctions Move Online
To whittle down the load of pending sales-a record 2.8 million properties received foreclosure notices last year, up 21 percent from 2008-local officials are turning to online auctions.
Florida, which recorded the second highest number of foreclosure filings in the country in 2009, is the first state to turn to Internet-based auctions to process distressed property sales. These cyber auctions can bring in buyers from around the state or around the world.Miami-Dade County started its online auctions last week, Palm Beach County started this week and Broward County should get rolling later in the first quarter.
Lloyd McClendon, president of RealAuction.com, a company in Plantation, Fl, that's handing the Miami-Dade and Broward auctions, said the first week was slow because potential bidders had be to walked through the process.
"Just because the process is online some buyers think they don't have to do the research and they can walk away with a home for $100," he said.
There are some bargains out there but bidders have to do the legwork, McClendon warns. To get started, they should see if there are any liens on the property and check on its condition and location. "The address could turn out to be waste dump," he says.
So far, RealAuction.com has handled 533 sales for Miami-Dade, including 117 on a single Wednesday. Sales totaled more than $26.8 million, McClendon reports.
Harvey Rubin, Miami-Dade's clerk of the courts, would like to see 300 online sales daily. He has big hopes for the online system. He told The Miami Herald the county has about 110,000 open foreclosure files and they're coming in at the rate of about 7,000 a month. He's also hoping the county will save $750,000 a year in processing these files.
Potential bidders have to register at RealAuction.com. Registration is free but bidder must put down a five percent deposit, either online or in person. Users will have online access to listings of foreclosed properties, photos, and links to the property appraiser's reports and property profiles on Zillow.com. More than 6,275 bidders, including 201 from outside the U.S., have registered to participate in the Miami-Dade auctions.
Grant Street Group is administering the auctions for the Palm Beach County, which has about 53,000 open foreclosure cases.
With foreclosure filings expected to reach 3 million nationwide this year, online auction houses will be plenty busy as other states bring the sales process into the digital world.