LATHROP — Facing a nasty drop in home sales and prices, one builder has turned to the Internet to find buyers for its new subdivision.

        San Ramon-based Pacific Mountain Partners has listed 18 new homes in its Lathrop subdivision on an online auction Web site, Freedom Realty Exchange, which allows people to place electronic bids on the homes over a month-long auction period.

    Though it’s not the first time someone sold a home on the Web, the auction is likely the first time a developer in California has used the technique to get people to move into a subdivision.

    Pacific Mountain Partners declined to comment, but Freedom Realty Exchange explained that the developer of the “Citrus at Mossdale Landing” subdivision had decided go with an auction because it had trouble unloading a large “standing inventory” of unsold homes.

    “Obviously the market is bad right now. We’re in a slump,” spokeswoman Ashley Carvalho said. “You can get a good price with auctions (and) it’s guaranteed to be sold by a certain date.”

    Live home auctions have become an increasingly common sight in hotel ballrooms since the housing market soured.
    While homes sell within minutes in a live auction, the bidding process stretches on for a month or longer online. Once potential customers register with the website and put down a $1,000 deposit, they can start placing bids over a specified minimum.

    Bids appear on the website next to a bidder's online alias.

    Carvalho admitted that the idea of purchasing a home over the Internet could be frightening for some folks.
    “It might scare people at first because they might think it’s not as personal,” Carvalho said. “It is new to people out there in the Central Valley. It takes some getting used to.”

    But Carvalho said many people prefer an online auction to a live one because there’s more time to think before placing a bid. Sellers like it, she said, because they reach a larger, potentially international audience.
    And it’s cheaper to use the Internet, said Dave Thompson, who heads the Web-based Pacific Auction Exchange in Manteca.

    “In a live auction, the seller does pay the marketing fees and the cost of the event (which) generally runs 1 to 2 percent of the home price,” said Thompson, whose company sells foreclosed properties. “It’s good for someone who has limited equity."

    Cheryl McFall, a realtor at Manteca’s Re/Max Executive, sees the online auction as just one more way to attract buyers in a difficult housing market.

    “I just feel like right now people are trying anything they can to get their properties sold,” McFall said.
    But she cautioned people against buying a home online without doing their homework first.

    “To me it’s always better to check with a local realtor, to know your market, know what the prices are … If you’re just fishing online for a property, you don’t get that.”

    The auction officially closed at 5 p.m. Thursday, April 10, but it could continue for days, because bidders are allowed 24 hours after the last bid to make a counter-offer.

    As of press time, none of the properties had received bids for more than half of their listed price  — between $600,000 and $750,000.