Internet-based initiative to help cities get better deals developed
A ".com" start-up has developed an Internet-based initiative to help cities get better deals when selling off tax liens by making it easier for investors nationwide to participate in the auction.
Chicago-based AX.com is using its World Wide Web site (www.ax.com) to promote tax lien auctions taking place across the country, including information on specific liens up for bid. Ax.com also will help out-of-state investors take part in the auction, even if they cannot make it in person.
Cities frequently sell the tax liens they have placed on property, taking what money they can through the auction and leaving the investor to pursue payment or foreclose on the property owner. But such auctions usually are advertised to local investors only, limiting the competition.
"We become the great equalizer, in that anyone from anyplace can actually bid on these liens," said Andrew Weber, vice president of government relations at Ax.com. The net result is a more competitive market, which should bring a city much better deals, he said.
At a minimum, an Ax.com representative will attend an auction and, acting as a broker, place a bid submitted through the Web site by the investor. The company tested that concept earlier this month in Atlantic City, where investors from 13 states and Puerto Rico took part.
But in the future, the company expects to work with cities to conduct fully electronic auctions, with the Ax.com Web site setting up the participants and managing the transactions. In either case, Ax.com will wire the money to the city by the end of the day.
A city does not have to pay to list its auction on the Ax.com. site. The company makes its money by charging the investor a percentage-based transaction fee on a successful bid.
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