MIAMI -- In a move that could speed the sale of massive numbers of distressed properties on the market, Miami-Dade County officially launched online bidding for foreclosures Monday, bringing together bidders from across the globe and launching hopes of an accelerated return to normalcy in the real estate industry.
The new system, managed by Plantation-based RealAuction.com, will completely replace the traditional courthouse procedure, and is expected to save the county $750,000 annually while cutting out a lot of the paperwork that has weighed down the process, said Miami-Dade Clerk of Courts Harvey Ruvin. The move comes at a time of high anxiety at the foreclosure division of Miami-Dade Clerk of Courts office, as it tries to balance a ballooning backlog of foreclosure cases and a slashed budget.
"This couldn't be happening at a better time for us," Ruvin said. "We are in an enormous avalanche of foreclosures. We have over 110,000 open foreclosure files, with an additional 7,000 coming in each month."
Ruvin says the new online system - capable of handling four times as many auctions per week as the courthouse - will help reduce the troublesome backlog.
Foreclosure-ravaged Florida is the first state to adopt an online auction system for distressed properties, using the software in nine counties, with three more to be added by March. Broward County is expected to launch an online auction system before March. The state has sold more than 20,000 homes via Internet auction since 2008, when the Legislature changed the law to allow for online public sales, said Lloyd McClelland, CEO of RealAuction.com.
Forty-six homes were auctioned off on Monday - including a Miami Beach studio and a South Dade 3-bedroom single-family home at $150,000 and $313,000, respectively. A New York investor was the only bidder to close a deal on Monday, purchasing a Miami Beach condo for an undisclosed amount.
In the months ahead, the county's online auction could sell as many as 2,000 properties per week, compared to the 450 homes the courthouse procedures regularly logged, allowing the county to reduce its caseload. Since the program needs minimal human maintenance, most of the 23 employees dedicated to running the traditional auction process will be redeployed to attend to other areas of the foreclosure process, Ruvin said.
In order to participate, potential buyers have to register at http://www.miamidade.realforeclose.com. Registration is free, and once bidders have completed this step, they can access thousands of foreclosed properties, view pictures, link to a property appraiser's report, take a street-level virtual tour of the neighborhood and check a profile on Zillow.com.
To get started, bidders have to put down a refundable 5 percent deposit - which can be paid online or in person. After entering a maximum bid, they can let their computer take over and bid on their behalf, or monitor the auction and bid manually.
By the time Monday's auction began, more than 2,500 people had registered at the site, and more than $1.9 million in deposits had been taken in, RealAuction's McClendon said.
With home prices in Miami-Dade down by more than 18 percent since last year, people from other parts of the U.S. and the globe are looking to take advantage of the Web's portability to score a bargain.
"The word is out," Ruvin said. "This has gone global - we're getting acknowledgment and bidders that are registering from all over the world. That just opens the universe to our process. We hope to have more people competing; therefore the prices will go up."
The site has seen visitors from dozens of countries, including Australia, Jordan and India, McClendon said.
Julian Dominguez, president of Foreclosure Investment Systems and a regular at county courthouse auctions, said the online setting will make the process more pleasant for first-timers by preventing courtroom bullies from using intimidation tactics.
"We have people that have created a level of stress across the system by their actions," Dominguez said of the traditional auction process. "It just created a tense atmosphere for those that came new, and we're looking for the new system to help with that."
County officials never worried about technological hiccups or first-day confusion, Ruvin said. Launching in 2010 allowed Miami-Dade officials to monitor RealAuction.com in action in Florida cities such as Jacksonville and Bradenton, which started online auctions in 2008.
For South Florida-based RealAuction, Monday's launch could be a catalyst for national expansion, McClendon said. Miami-Dade County has one of the highest foreclosure rates in the country and is the largest metropolitan area to adopt the online auction procedure so far. The company, which receives a "success fee" of up to $70 for each property sold, has its sights on moving into other high foreclosure states like Nevada and California.
"If this can be proven to work in Miami-Dade, there's no county in the country where this can't work," McClendon said of his privately held business. "So this is a really important launch for us."
Source: http://www.miamiherald.com/classifieds/real-estate/story/1420051.html
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