The difference was dramatic: In its January online auction, Kern County, California, sold 88 percent of the 351 tax-defaulted properties up for sale. The properties sold for an average of more than $34,000 and over 140 bidders took part in the process.
In the past, when the county held traditional physical auctions, it sold off less than half of the land parcels offered. Those auctions usually attracted about 75 bidders and netted an average of $4,000 per property.
County officials now know that the reason for poor showing in the past wasn't the properties offered--it was the bidder pool. By eliminating the requirement for bidders to be present physically, the online approach allowed many more people to participate. Bidders were, in fact, drawn from as far away as Taiwan and New Zealand.
The county first tried a pilot sale in September, when it sold 11 properties that had previously been passed over in a live auction. With the September and January successes in hand, the county is planning to hold at least three online auctions per year in the future.
For Kern County, the benefits of the auction have extended beyond just financial value. "When we performed a physical auction, it took up a large percentage of our staff's time ," says Jackie Denney, the county's assistant treasurer-tax collector. "With the online auction, most of them could continue to do their regular duties."