The number and total value of the county’s delinquent tax certificates dropped off sharply this year, continuing their steady decline in recent years.
At the May 24 sale in the jury room on the third floor of the county courthouse, conducted by Tax Collector Jimmy Harris, the county sold 1,206 certificates, worth nearly $1.04 million. This total was a little more than a third of the $2.94 million sold off in 2009, when 1,791 certificates were snatched up by investors.
Over the past three years, the totals have steadily declined, from 1,668 certificates worth $2.36 million in 2010, to 1,585 tax certificates totaling $1.96 million in 2011, to 1,413 tax certificates worth $1.52 million last year.
“More people’s paying their taxes on time, or their mortgage companies,” said Harris. “The taxing districts are getting their money in a more timely fashion.”
As required by Florida statute, the county had to assume possession of all tax deeds under $250 for homesteaded properties, and these totaled $11,519, he said.
The county received a 5 percent commission from the sale of $48,319, Harris said. Also paid for out of the tax sale proceeds were the costs of advertising for three weeks prior to the sale, which totaled $27,642.
Harris, who was assisted at the sale by Sarah Braswell, one of the tax clerks, said about 65 people attended the sale, down by about a dozen from last year. He said the rates paid on the certificates were bid down considerably from a starting point of 1.5 percent per month, or 18 percent per year, simple interest.
“The rates were low this year and they stayed low,” he said. “It’s whatever the bidders are willing to take for their investments and banks aren’t paying very much so they’re willing to take less to secure their investment.”
At least 60 of Florida’s 67 counties have opted for online auctions, but Harris plans to keep the live sale the way it is, noting that the bidders, mostly local, prefer it that way. One Tampa group of investors spent about $270,000 on certificates at this year’s auction, Harris said.
A recent investigation by the Sun-Sentinel newspaper in Fort Lauderdale revealed that going to an online format, in which anyone from anywhere can bid, could crowd out local investors. The reporters found that many of the state’s on online auctions have come to be dominated by large financial institutions, which have dramatically increased their odds of winning by forming thousands, even hundreds of thousands, of proxy or shell companies to flood the auction, giving them a huge edge in tie bids where the winner is chosen by lottery.
“"The majority of the smaller bidders are getting squeezed out or dropping out because they cannot effectively compete," said Miami real estate agent Murry Diamond, 60, a longtime participant in South Florida tax auctions. “I'm one of the people they're driving out.”
In the online auctions, bids flood in from all over the world, from cyber competitors who can place thousands of offers within milliseconds with a few keystrokes, wrote the reporters.
They noted that in online auctions, tie bids are broken by a random number generator, a computerized equivalent of how winning numbers are picked in the Florida Lottery. The result, they concluded, is that big investors now all agree to accept the theoretical minimum return, and swamp the system with simultaneous bids to increase their chances at being picked.