Region 1 Planning Council, located in northern Illinois, operates the Northern Illinois Regional Land Bank and has been an ePropertyPlus subscriber for a number of years. One of the things that sets Region 1 apart from other land banks is they run the county tax trustee property sales for Winnebago and Boone Counties. We think managing a tax trustee sale extends naturally from their role as a responsible steward of publicly owned blighted property. We’re helping Region 1 set an example for other land banks by modifying ePropertyPlus to support online property auctions.

About the Tax Trustee Sale

In Illinois, the law provides for two types of property tax sales. At the annual sale, buyers are buying tax certificates equal to the total debt on a property, including unpaid taxes, penalties & interest, and fees. Buyers are willing to bid on the debt, knowing that most property owners redeem – or pay back the debts. At the sale, the winning bidder is basically paying the county what it is owed, earning the right to subsequently collect the same amount plus interest from the original taxpayer. Tax sales attract speculators looking for a “sure thing”, given the high redemption rate, albeit at the expense of owners facing financial hardships. For this reason, tax sales tend to have a noxious reputation and are the subject of much reform advocacy.

A tax trustee sale comes after a property has been offered at least two prior annual sales, with no one buying the certificate. The county can sell the certificate for less than the total debt owed, making the tax trustee sale attractive for bargain shoppers willing to bid on what’s left after the annual sales are done- hence the term “scavenger sale.”

Tax Sales and Land Banks

In the United States, a land bank is a single-purpose entity established by local governments to be a responsible steward of blighted property. Land banks have different characteristics, but what is common to almost all of them is they address vacant and blighted property by leveraging unique powers and often through relatively complex processes.

In this respect, Region 1 is doing something other landbanks could do, but don’t. Region 1 is proactively trying to sell property and encourage its redevelopment. Most trustee sale agents simply run the sale; whether property sells, at what prices and to whom is not of primary concern. There is an opportunity cost to the traditional model.

We think other land banks should move into the tax sale space. For one, most share the same interest in breaking cycles of speculative investment as does Region 1. Moreover, they may be much more equipped to manage the sales process, including community-centered-sale outreach, creating a user-friendly sales process, and monitoring what happens post-sale. These are all activities for which ePropertyPlus is well-suited.

Region 1 is an ePropertyPlus subscriber and uses ePropertyPlus to manage its inventory of property. This month, Region 1 began using ePropertyPlus with Auctions. Auctions are a relatively new enhancement we added to ePropertyPlus, following the lead of the Shelby County Land Bank in Memphis. Shelby County is another ePropertyPlus subscriber and has a bid-off process that works like a private auction. Enhancing ePropertyPlus to support bid-offs for Shelby inspired us to explore how we might evolve ePropertyPlus for auctions more generally. Region 1 is the first subscriber using the Auctions and here is how they work:

About ePropertyPlus with Auctions

STEP 1: Enable ePropertyPlus with Auctions

After ePropertyPlus Auctions are enabled, the subscriber can decide which properties to sell and schedule one or more auction events. Region1 set up a single auction event that runs over a 10-day period. It includes 476 properties and each is being auctioned at the same time. Region 1 configured a start- and end-time, opening minimum bid & bid increment, and created custom bidder notifications that get emailed automatically. The auction event runs on ePropertyPlus Public Site, a turnkey marketing platform included in each ePropertyPlus subscription.

STEP 2: Let Bidders Register & Place Bids

Next, Region 1 announced the sale and invited interested bidders to register participate. Region 1 promoted using social media, via email newsletters and through other community outreach. They gave plenty of advance notice and even created simple YouTube video to explain to bidders how to participate. As people signup, ePropertyPlus sends them email notifications. The first lets them know when the auction is going to begin; reminders are sent as the start time approaches.

As soon as the auction starts, bidders can place bids on the Public Site Property Profile page for the property in the auction.  

STEP 3: Track Bids & Keep Bidders Engaged

During the auction event, ePropertyPlus captures bids & bid histories (for audit purposes) and updates the Public Site property page for the specific property in real time, just like an eBay auction. Each bidder knows the current high bid and time remaining in the event. ePropertyPlus also sends system-delivered emails & notifications, so auction events are convenient & transparent.

Since Region 1’s auction is taking place over 10 days, bidders don’t need to attend in real time; they just need to come back and update their bids as bids change and if they want to continue bidding. On the backside, Region 1 can see who is bidding and with what amounts.

STEP 4: Complete the Auction Event

When the auction event is done, ePropertyPlus will close the auction and notify the winning and non-winning bidders via email. Region 1can create closing documents with ePropertyPlus Document Generation and may decide to accept payments online. They’re not accepting online payments with ePropertyPlus, but they can in the future.  

Conclusion

Setting up auction events, running the auction, and performing all of the steps involved is not time consuming or complicated. Because auctions are now built into ePropertyPlus, ePropertyPlus operates as an auction platform on demand. We think it should help our subscribers – land banks, city and county governments, and others – take advantage of the excitement and efficiency of online auctions, without needing do much more than turn it on. We expect it will help Region 1 capture optimal sale prices, while letting them manage their other day-to-day activities.

ePropertyPlus was built as the end-to-end property portfolio data management solution needed for public sector organizations. ePropertyPlus with Auctions makes it that much better.

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