At the auction Thursday, Nelson said that all the properties involved in the auction had been foreclosed upon, and the highest bidders would have clear title. Qualified buyers would be required to make a 3 percent down payment with FHA financing available at 5.875 percent on a 30-year, fixed rate mortgage. Lender financing was available for up to 90 percent of purchase price, subject to qualification.

Under the rules of the auction process, sellers have seven business days to confirm the high bids, Nelson said. He said bidders were required to bring $10,000 in cash or cashier's check for each property they intended to purchase.

Nelson predicted that because of the economy, his company would probably be doing auction sales in Salt Lake every 60 to 90 days for the next three to five years.

"The high-end market is just crashing in the Utah area right now, with homes over a million dollars, and there will be a surplus of them, probably a 5-year supply by October or November," he said.

Veteran builder Cory Olsen won the auction for a Bluffdale house valued at $726,000 for just $275,000 and felt like he got an excellent buy.

"I didn't intend on bidding on that one, but the number stayed really low," he said. He said his ultimate plan is to turn the property around and sell it for a profit.

"When you buy it at this price, you can do a lease option and still have a positive cash flow on the monthly income," Olsen said "It almost feels criminal to take advantage of buying things at pennies on the dollar. This stuff is selling for 40 to 60 cents on a dollar."

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E-mail: jlee@desnews.com