YOUNGSTOWN Alabama company sells local homes in online auctions

Many of the buyers on the online auctions are investors looking for properties to fix up.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- Six area houses are being auctioned online over the next two weeks.
An Alabama company that has been running online auctions of foreclosed homes in 13 states started its first auction of Ohio properties Thursday.
Internet users familiar with bidding on Beanie Babies and other collectibles will find the process familiar.
"Our goal is to become the eBay of bank-owned properties," said Mike Keracher, chief financial officer of AMSauctions.com.
How it works: The company sets a minimum bid, which in some cases is $1,000, and sets the increments at which bids can be raised. Bids must meet a reserve price set by the owner.
The auction company's initial Ohio auction includes homes in Youngstown, Sebring and East Liverpool.
A Pennsylvania auction which also started Thursday has homes in Sharon, Hermitage and Grove City. The company has offered auctions in Pennsylvania before.
All of the area homes are owned by Countrywide Credit Industries, which is one of the largest mortgage providers in the country. The Ohio and Pennsylvania auctions end March 28.
Keracher said financial institutions like selling foreclosed homes through online auctions because it's cheaper.
Before his company started this service in 2000, it would come into a city and organize an auction by printing a catalog, advertising and renting a hotel ballroom. Financial institutions had to pay the cost of that.
With the online auctions, they only have to pay a fee to the property's real estate broker. AMSauctions.com receives its fee from the buyer.
Fees ranges from $500 for a house that sells for under $10,000 to $2,000 for a house that sells from $75,000 to $100,000. Few homes sell for more than $100,000.
Online bidding is better for buyers because they have more time to review the property and consider their decisions, Keracher said.
Time to think about it: Under normal auctions of foreclosed properties, a house would be up for bid for only a couple minutes. With online auctions, bidders have two weeks to think about their decisions and can go through the house as many times as they want by arranging visits through the broker. Bids can't be withdrawn.
AMSauctions.com has sold 1,600 houses.
Keracher said many of the buyers are investors who are looking for homes to fix up so they can be sold or rented.
Some of the houses are in move-in condition, while others need work because they have been vacant for months, he said.
Most of the homes sell for between $30,000 and $50,000. It has sold row houses in Baltimore for $1,000 each. The most expensive home was in Sterling Heights, Mich., which sold for $525,000.
shilling@vindy.com