‘Unlucky’ owners forced to sell at $0.82 reserve after flood wipes out $271k deal

A flood-ravaged cottage could sell for as little as NZ$1 ($0.82) after an overflowing river tore apart a real estate deal worth hundreds of thousands of dollars just weeks before settlement.

The two-bedroom property in New Zealand’s Karangahake, in the Waikato region, sold last November for NZ$330,000 ($271,439), nearly $100,000 below its original asking price.

But just weeks before the deal was sealed, storms in January made a nearby river swell, flooding the home and killing the sale.

Harcourts agent Steven Bridson said the buyers used a clause in the contract to walk away.

“Unfortunately, the sale didn’t get completed,” he told OneRoof.

“It’s a bit of an unlucky situation where that all happened within the timeframe.”

The property was later deemed a hazard by the council, leaving the owners to deal with the fallout.

Insurance covered the damage, but much of the home was stripped back in the process, including the kitchen and bathroom, leaving little more than a shell behind.

After remedial work, the Hauraki District Council declared the house safe to occupy again.

But with the risk of future flooding still hanging over the property, the owners decided not to rebuild.

Instead, they kept the insurance payout and put the 1.34 hectare site back on the market on an “as is, where is” basis, with a NZ$1 reserve price.

Bridson said his clients were prepared for the possibility that the hammer could fall at the absolute minimum.

“They are definitely prepared that it could sell for NZ$1,” he said.

The owners bought the property for NZ$182,000 ($149,664) in 2011 and had lived there before turning it into a rental.

It has flooded twice in the past three years.

While the home itself is now stripped back, the sale still includes more than a hectare of land across two titles, along with a villa and a separate shed.

“If you’ve got the know-how and vision, there could be a very clever way [forward],” Bridson said of the future buyer.

He added that it was rare for a natural disaster to derail a deal after it had already gone unconditional.

The auction is scheduled for July 8, but buyers are likely to need cash to secure the deal, as financing for an “as is, where is” property is particularly difficult to obtain.