Lobbying to change California law
No market, however, is bigger than California. The state has seen about a 250% increase in foreclosure auctions in the past year, according to MDA DataQuick. More than 26,000 homes were put up for sale at auction in July.
Those figures don't include the private auctions of homes that have been bought by banks. Many of those already are sold online by companies like RealtyBid.com, Bid4Assets Inc. and Zetabid, which is owned by Tribune Co., the parent of the Los Angeles Times.
Some of those companies are hoping RealAuction and its lobbying firm, Akerman Senterfitt, which has offices in Los Angeles, will pave the way for changes in California law. The pair say they are working on it.
But before they will be allowed to conduct public auctions of California real estate online, proponents may face opposition from the trustees who run the sales as well as skeptical lawmakers.
"I've been watching this happen in other areas, and I think that very soon now we are going to have a very enterprising lobbyist saying that this is exactly what the market needs right now," said state Sen. Michael Machado (D-Linden). Machado, chairman of the Committee on Banking, Finance and Insurance, is leaning against online auctions.
RealAuction went through a similar process two years ago in Florida, hiring Akerman Senterfitt to craft -- and push -- legislation there to allow the online auctions.
They pitched it as a "twofer," said lobbyist Larry Williams.
"You can save public dollars by cutting down on the amount of work and time these auctions take, and you're doing it without jeopardizing anyone's property," Williams said.
The company's efforts paid off this year, and Florida Gov. Charlie Crist signed a law allowing counties to run their auctions online.
Bidders will now have 30 days prior to the auction to go through various public documents linked to the RealAuction site. They will be able to put a 5% deposit into a Real- Auction account, then place bids before the day of the auction. If they win, they have to wire the rest of the money to the auction company by day's end.
"This opens up the pool of bidders, which will raise prices and increase the number of houses sold," said RealAuction's McClendon.
"Before, the auctions were controlled by a small group of professional bidders, and the auctions could be over in a matter of minutes. Now you can be on your boat and place a bid 30 days in advance."
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william.heisel@latimes.com
