Online Foreclosure Auctions Unleashed

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In the past few years, unique items that have appeared on the eBay auction block include a grilled cheese sandwich with the image of the Virgin Mary; a vampire killing kit; an air guitar and even a Saginaw, Mich., home that sold for $1.75.

It’s that last item that might have resonated with officials in Lee County, Fla. In eBay-like fashion, they're selling foreclosed houses online.

Foreclosures are a nagging problem in Lee County and in other Florida locales. According to the latest numbers from RealtyTrac, one in every 140 Sunshine state housing units now has a foreclosure filing in the state, and 62,000 Florida homes entered into foreclosure in August alone.

To streamline the foreclosure process, Lee County is closing in on a deal to sell thousands of foreclosed homes via the Internet, using an eBay-like auction site developed by Realauction.com, by the beginning of 2010.

Lee County’s Clerk of Courts office says that it’s backed up with more than 22,000 mortgage foreclosures that it wants to put up for auction. Historically, that has meant holding auctions the old fashioned way one-by-one on the grounds of the Lee County Justice Center. The county can’t keep up, even after the introduction a new county-wide foreclosure management campaign called the “rocket docket” earlier this year.

Why go the cyber-auction route? Taking the foreclosure auctions online will save on staffing resources and should also move the auction along at a quicker pace, says Lee County Clerk of Court Charlie Green, in an interview with the Southwest Florida-based News-Press.com. Lee County officials also hope to attract a wider, even global, audience by going online.

Here’s how the on auction plays out. Lee County posts available foreclosure properties on a soon-to-be named Web page on the Lee County Appraiser’s site and the Clerk of Courts' Web site (the site's auction software is hosted by Realauction.com).

In addition to storing data on home prices, tax liens and titles, the Lee County auction sites will also feature GoogleMaps links so bidders can view properties.

Buyers can scour the site, post bids and track the bids in real-time. There could be strict rule for bidders, though. A similar online auction site in Pasco County, Fla., allows only bidders who pay a 5% “deposit” on bids to participate, and the winning bidder must also pay a $27 auction fee to Realauctions.com. On the sell side, homeowners must pay a $70 fee to the state of Florida to list the property on the Pasco County site. Lee County officials estimate the auction fee will be somewhere between $20 and $40.

On the downside, most bidders especially those out-of-state won’t be able to physically check out the houses they’re bidding on. Florida homes suffer from a chronic problem inferior drywall that often emits a foul order and breaks down easily. Online buyers may miss a problem like that when bidding online, so its caveat emptor, or “buyer beware” for auction bidders.

But Lee County is thinking positive. Its online campaign may not be able to cure the housing market, but county officials hope it can kill an unwieldy foreclosure auction process.

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