When Robert A. Binder started buying foreclosed properties in Pinellas County in 1968, he would stand on the courthouse steps and make his bids. But because there was so much disruption from passers-by, the auction was moved to the courthouse lobby.
Now, in an effort to save money, the auction is moving to the Internet. Binder isn't happy about it.
"The whole thing of a public auction is the intent, and it will not be public when it goes private," Binder said. "Only a select few will be able to bid, and it takes out the public sector. This system has been working for 240 years."
At 11 a.m., five days a week, two county deputy clerks conduct auctions of foreclosed properties in the lobby of the courthouses in both Clearwater and St. Petersburg. But beginning in October, the auctions and tax lien sales will be handled by Realauction.com, a private company from Fort Lauderdale that specializes in online foreclosures and tax certificate sales.
State statutes allow for such "electronic" sales.
"We have suffered tremendous budget cuts in the last couple years, and this is a more efficient way to do the sales," said Colleen Ford, director of court and operational services for the Pinellas County Clerk's Office. "And there are a lot of advantages for the purchaser who will be able to do multiple sales and do it from the comfort of their own home."
Founded in 2004, Realauction already handles online property sales for 18 Florida clerks of court, including those in Pasco, Sarasota and Manatee counties. The online program, which also generates much of the needed paperwork, comes at no cost to the counties.
"It's a huge administrative cost saving," said Craig McIntyre, Realauction's vice president. "All the paperwork will automatically be generated in the system. The benefits to the clerks in terms of efficiency will be huge, especially with the backload of foreclosures cases."
Florida has been hit hard by home foreclosures in recent years, leaving court clerks struggling to keep up with the sales. In 2005, there were 3,698 foreclosure case filings in Pinellas County. In 2009, there were 15,453. There have been 7,438 filings from January to July of this year.
"We really believe this is going to be better for the buyer and not just for the clerks," Ford said. "It's better for the seller of the property because there will be more opportunity for buyers around the country to bid."
Instead of coming to the courthouse, bidders will search properties online from their homes or offices. In addition, computers are being set up at both county courthouses for those who don't have computer access. Buyers must deposit money into a county account before bidding. A 5 percent deposit is required for each property that's bid upon.
The site will have Internet links for the auctioned property that include its tax history, satellite map, property appraiser information and the final judgment.
The properties are auctioned one at a time. If a new bid comes in with less than 30 seconds left in the auction, the auction is extended one minute, giving bidders an opportunity to see the new high bid.
The winning bidder must have a certified check for the property by 11 a.m. the next business day. That payment can be made in person or via wire transfer.
"This prevents something called collusion where two or three of the locals gang up on the bidders and control the sale, making it harder for smaller bidders to come in," McIntyre said. "Now because it's online, it goes back to fairness."
The bidder pays a $49 fee for each property purchased. That money is paid to Realauction.
"At first it's a change," McIntyre said of the online process. "But once they embrace the change, they love it."
Local training on how to use Realauction.com will be provided to the public before the system is put in place.
Karen E. Rushing, Sarasota County's clerk of court, said going to Realauction has been an improvement. The county started using the company in July 2009.
"It has allowed us to handle the sales much more expeditiously," Rushing said. "Before we got started there were a lot of people concerned, but we got over that hurdle."
Officials in Pasco County, where foreclosure filings jumped from 1,668 in 2005 to 9,295 in 2009, say working with Realauction has resulted in 3,002 registered bidders. One of those regular bidders is from Indianapolis.
"It created efficiencies," said Nikki Alvarez-Sowles, chief operation officer with the Pasco County Clerk and Comptroller's Office. "A lot of work that clerks performed pre- and post-foreclosure sale, that work has now doubled and tripled. The employees that were utilized to conduct sales are now handling the paperwork."
Pasco County started using Realauction last November and has put 1,988 properties up for sale. Previously, Pasco would hold auctions three days a week out of its New Port Richey and Dade City locations. Now, auctions are held five and four days a week respectively.
But some locally are still not convinced that putting the sales online is the best move for Pinellas County.
Binder said it's "privatizing the auction where only a select few can buy properties."
Richard Avichouser, who has been purchasing foreclosed properties in Pinellas County since the early 1970s, agreed with Binder.
"I don't like it, and it will become a big business measure," Avichouser said. "I don't know anyone who does this on any kind of regular basis who is happy about this."
Contact Demorris A. Lee at [email protected] or (727) 445-4174.