Spotlight On: Richard Warner, CAI, AARE, President, Warner Real Estate & Auction Company, Inc.May 14th, 2012 by Ori Klein
Spotlight on . . .Richard Warner
RW: My background is in commercial real estate, specifically gas stations, truck stops and car washes. I grew up in the family business which was an AMOCO distributorship, worked for Truck Stops of America and the largest Texaco distributor in New Jersey. I learned the petroleum business from pumping gas to purchasing sites, renovating existing sites, managing locations and building car washes. The current economy has certainly affected commercial real estate values, and buyers are finding it difficult to finance purchases especially if there is an existing consistent cash flow. We’re being very selective on the assignments for selling commercial real estate, especially for private sellers. Institutions and corporations are, in my opinion, better sellers in the current economy. The seller has to be ready to sell the property and more importantly, be able to sell the property.
PA: I see from your website that your company has extensive experience with the auctioning of farms and development land sites. Do you see these types of properties selling more frequently via auction than commercial properties? Than residential properties?
RW: Yes, farms have been some of our most successful auctions in the past few years. The demand for good farmland coupled with the softening of the prices has created great buying opportunities for farmers and land investors. I think there is an abundance of residential and commercial properties on the market currently, so the demand is nominal, whereas buying a farm is generally a once-in-a-lifetime opportunity. The types of residential properties we’re targeting for an auction are condos and luxury homes.
PA: What group have you been dealing with more – private owners, business owners or banks? Why?
RW: For the past few years, the majority of business and best auctions have been coming from institutional sellers, government entities and estates.
PA: How do you think the Northeast compares to other parts of the country in terms of sales at auction?
RW: The Northeast sales at auction are less prevalent. Pennsylvania is an auction state and real estate auctions are more popular there than in New Jersey.
PA: What are your thoughts/predictions for the auction business in 2012? What areas/types of properties do you think will do well? Which ones will decrease?
RW: I think 2012 is going to be a good year for selling real estate at auction. Institutional clients are slowly considering the benefits of selling at auction and will be more likely to dispose of their REO inventory. Farms will continue to be good properties to sell at auction along with income properties. In my opinion, most residential and commercial property sales will be about the same as in 2011. Building lots are a dime a dozen, so we tend to pass on those prospective sales unless they are part of a lender’s portfolio and we can sell them absolute.
PA: What are your top 2 or 3 tips for buyers?
RW: Do your homework. Understand the property is being sold “as is, with all faults” and have your financing lined up before auction day. Most auction firms have strategic alliances with lender partners which can assist you in getting pre-approved for financing. Go to the auction prepared and have a limit on the most you can pay for the property. Review the Property Information Package and other pertinent information provided by the auction company, but do your own due diligence.
PA: What are your top 2 or 3 tips for sellers?
RW: Have in your mind, ‘it’s time to sell the property and move on’. Consider the carrying costs of keeping the property in your decision to sell at auction. Ask for a written proposal and line item budget from the auction firm(s) you are interviewing and review it thoroughly. Also, request testimonials/reference letters and sample marketing pieces from the firm(s) you are interviewing as well.
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