|Realauction.com's Lloyd McClendon says moving foreclosure auctions from courthouse steps to the web has greatly widened the bidding pool. [Photo: Eileen Escarda]|
Lloyd McClendon's south Florida company threatens to end the timeworn practice of holding foreclosure auctions on the courthouse steps. He's taking auctions in 10 Florida counties online as a springboard to going national.
Serial entrepreneur and Broward native McClendon, 41, started Realauction.com in Plantation as an auctioneer for counties selling tax certificates, in which investors pay delinquent taxes to counties in exchange for liens on the properties.
Florida counties with online foreclosure auctions:
|* Orange County is in the process of selecting a vendor.|
In 2008, he successfully lobbied the Legislature to let counties hold foreclosure auctions online, making Florida the first state to allow online judicial sales.
Courthouse auctions in most cases are formalities in which the lender takes title to the property. But they tie up attorneys and court clerk staff time. McClendon's firm as of mid-January had completed 20,000 foreclosure sales statewide, earning a fee that averages about $35 per case, paid by the winner. Competitor Grant Street Group, based in Pittsburgh, has the online auction rights in Palm Beach County and wants to win more Florida business.
Aside from saving clerk staff time, eliminating the need for bidders to be physically present at a particular courthouse on a particular day has widened the bidding pool, McClendon says.
Usually, courthouse sales are attended by a small cadre of investors. But the online auctions in Miami-Dade, for example, have 5,197 registered users, 4,463 of them from Florida with the remainder from nearly every state and a host of nations. His 30-employee company will post $5 million in revenue this year.
"We certainly recognize this is kind of a wave we're riding. Hopefully, foreclosures are not going to remain at this level for 10 years or something," says McClendon. "We do see some other potential markets for us. I would like to find something that's sustainable, not cyclical."