The days of selling tax certificates on the steps of the Franklin County courthouse, actually from out of a small meeting room on the third floor, are over.
No longer will a small group of eager bidders gather on the last Friday in May in that room, where they are greeted by the tax collector, set before him or her a long printout of properties whose owners are delinquent with their taxes, along with a large bowl of candy for bidders to indulge in, as they go through the 800 or so properties in the course of the morning and afternoon.
No longer will each of those gathered be holding a card with their number on it, and then in rapid succession, each will have a chance to hold it up so as to cast a bid and see for what percentage they can get the tax certificate.
Sure, the interest rates, which start at 1.5 percent per month, or 18 percent per year, simple interest, will continue to be bid down in quarter of 1 percent increments, until the drop to as low as 0 percent.
But from now on, it won’t be in person, where bidders can always look out the giant window past the tax collector’s head and out on to the Apalachicola River. Or step out in the hallway to enjoy a cold Coke or a nibble on the miniature candy bars.
“No soft drinks and no power outages,” said Tax Collector Rick Watson, referring to a glitch a few years ago that forced the auction to break early for lunch, before the problem could be remedied.
Fresh from his election last November to a full four-year term, after he was appointed in 2017 by Gov. Rick Scott to fill the remaining term of his predecessor Jimmy Harris, Watson decided to go to online sales.
“At each of the tax collectors conferences the issue comes up of internet sales,” he said. “Only a handful of counties do live auctions now.”
Because the cost of conducting, marketing and advertising the tax certificate is figured into the price tag for each certificate, it won’t cost the county any more or any less to go to online sales.
But it is likely to attract more bidders, and will add to the time that property owners have to pay off their delinquent taxes, after they have appeared in the legal advertisement of all the properties. That insert will appear with the May 9 Times and will run for three consecutive weeks.
“Some people don’t pay until their name appears in the paper,” Watson said. “This essentially gives them another week.”
The May calendar for the tax sale is essentially the same as it has been, except it’s all done online now at www.taxcertsale.com/franklintaxsale.
Registration began Friday, with the first day of bidding this Friday, May 3. In order to take part in the online sale, bidders have to put up a deposit equal to 10 percent of the total volume of bids they intend to place. To make that deposit via an electronic check, bidders have until May 21. The last day to accept deposit by any sort of certified funds is May 30.
Once bidding starts tomorrow, can make their bids up until midnight on Friday, May 31. They’ll know only how many others have bid on a property, but not how much they have bid.
The computer online will then calculate who is to be awarded a particular certificate, and announce it by 10 a.m. on Saturday, June 1. Winners have until the end of the business day on Tuesday, June 4 to pay for their awarded certificates.
Those whose purchases have not exceeded their deposit will have the balance refunded.
In two important ways, the process varies from the traditional live version.
In a live sale, no two bidders can have the same bid; the tax collector keeps the auction going until someone has cast the lowest bid.
But online, it is possible for several people to have bid the same percentage rate. In that case, the computer will randomly select who is awarded the certificate.
The other variation is that whoever is the lowest bidder, obtains the certificate at no less than one-quarter of 1 percent beneath the next lowest bidder. So if we had four bidders on a certificate, and two bid 12.5 percent, and one bids 11.75 percent, and a fourth person bids 7.25 percent, then that fourth person, clearly the lowest bidder, would be awarded the certificate at an interest rate of 11.5 percent, one-quarter of 1 percent below the next highest bid.
In addition, the system has safeguards built in that will stand in the way of an entity trying to corner the market by lodging a multitude of bids in a way that will make it difficult for others to secure them. A husband and wife cannot bid on the same property, nor can several bidders that are all bound to a common financial entity, so that the Acme Corporation cannot register many bidders who each vie to crowd out others.
How this will all play out we’ll have to wait and see, but Watson believes it will be much like what has been shown at live auctions.
“The average interest rate in other counties is 14 percent,” he said. “The number of bidders will probably increase a little but not significantly, if other counties are a guide, and it could be a few less too.’