Sunday, May 22, 2011

Foreclosure-auction website AZ Bidder a hot property

Dan Mayes spends most of his days in a former church painted bright blue in south Phoenix. He rarely leaves his desk or takes his eyes off his computer.

Mayes runs the first real-time, live online bidding service for foreclosure homes sold at trustee-sale auctions in metro Phoenix. His team of four bidders is at the auctions each day making bids for clients and tracking and reporting all the bids at other auctions.

The service posts those numbers on its website,, where clients can place bids or just monitor sales.

Most of metro Phoenix's trustee-sale auctions are held in front of the Maricopa County Courthouse in downtown Phoenix.

But to track all the auctions in the county, AZ Bidder also has to monitor sales that may be done in-house at five or six law offices that handle their own trustee sales.

So anytime between 9 a.m. and 5 p.m., an auction may be going on somewhere.

Mayes watches the numbers from every auction on two large computer screens at his desk. If one of his clients is the top bidder on a home, he and the client know seconds after the auction closes.

Often, he's watching two to three auctions at the same time, the data being fed to the system by team members on the scene with smartphones.

"I am like the air-traffic controller for our system," said Mayes, who helped build the bidding system for travel site Priceline before starting the firm. "If something goes wrong or right, I see it within in seconds and can fix it or alert my bidders or clients if it's something they need to know."

Watching the auctions online can be addictive for clients and those who see them for the first time. Mayes said sometimes he looks up and realizes he hasn't moved from his desk in four hours.

Mayes along with three other partners including his brother Tim Mayes, a former banker and prominent Chicago-based investor, started AZ late last year. The siblings had been operating the system for several months and realized as trustee sales started to climb in metro Phoenix it could be a popular tool for other investors besides themselves.

AZ Bidder started taking subscribers early this year, charging $150 a month for access to the system, which includes a calculator to figure out rents for buyers who plan to become landlords.

Although most clients log in and set their maximum bid, some bidders like to bid live. The requests are transmitted to an iPad or smartphone carried by bidders such as Anthony Thomas, who make the bids.

Hundreds of people who knew Thomas from the auction or heard about AZ Bidder from friends and clients signed up - so many that AZ Bidder realized it could up its subscription to $1,500 a month.

Then Mayes realized competitors were using the system, so he changed the fee structure.

Now, to subscribe and bid on as many homes as they want, clients must pay a $10,000 deposit. The money is used to fund a cashier's check required to buy a foreclosure home at a trustee sale in Arizona.

AZ Bidder doesn't receive a fee unless the bidder is successful. Commissions vary by client and volume of sales but generally are $1,500 to $2,500 a house.

The company averages six successful purchases for foreclosure homes a day.

AZ Bidder has more than 800 registered users now.

"I think we have opened the door to Phoenix's trustee-sales auction for a lot of people who had trepidation about bidding before," Mayes said.

"We probably also have some customers who are willing to pay the $10,000 just to check out the auctions as they happen everyday. They might start bidding when they are comfortable."

by Catherine Reagor The Arizona Republic May. 22, 2011 12:00 AM

Foreclosure-auction website AZ Bidder a hot property

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