- A Waikato house that flooded before settlement is back on the market with a $1 reserve.
- The property, which sold for $330,000 last year, was deemed a hazard after the January storms.
- Harcourts agent Steven Bridson says the owners are motivated to sell “as is, where is”.
A Waikato house that flooded just weeks before the new owners were due to settle is now back on the market and heading to auction with a $1 reserve.
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The two-bedroom cottage on 7362 State Highway 2, in Karangahake, was sold in November last year for $330,000 – almost $100,000 below the asking price – but the deal was cancelled after severe storms in January caused a nearby river to overflow.
Harcourts agent Steven Bridson told OneRoof the property flooded before settlement. “Unfortunately, the sale didn’t get completed,” he said. “It’s a bit of an unlucky situation where that all happened within the timeframe.”
With their buyers triggering a get-out clause in the contract and the council deeming the property a hazard, the owners were forced to pick up the pieces.
The house was stripped of almost everything after flood waters caused serious damage to the property. Photo / Supplied
After the insurer assessed the property, the owners carried out some remedial work, but the house was stripped of almost everything, including the kitchen and bathroom.
Last month, Hauraki District Council deemed the property safe, but the owners, having decided that there was a risk of the house flooding again, decided to keep the insurance money and sell it “as is, where is”.
Bridson said his clients were ready to move on and extremely motivated to make a deal. “They are definitely prepared that it could sell for $1.”
The owners paid $182,000 for the house in January 2011 and lived in it before turning it into a rental. It has flooded twice in the last three years.
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Bridson said obtaining finance for an “as is, where is” property was tricky, so likely buyers were those with cash and experience in dealing with more complicated properties.
Whoever bought it was still getting 1.3ha of land, a character villa and a shed, which had to be worth something, he said.
The property was a blank canvas, he said. “If you’ve got the know-how and vision, there could be a very clever way.”
Bridson said he had never come across a case like 7362 State Highway 2, saying it would be rare to find a natural event upending a deal between going unconditional and settling.
The house and garage sit on a 1.34ha section. Photo / Supplied
He had, however, experience with $1 reserve auctions. In November 2023, he sold a beachfront home on the Thames Coast Road, which had been destroyed in a large landslide. The property got $375,000 under the hammer after 40 bids were placed.
Kristine King, the chair of the property law section for the New Zealand Law Society, said that buyers could cancel unconditional sales before settlement for a range of reasons, including severe fire or storm damage.
A transaction could also be cancelled if it was discovered that the vendor had badly misrepresented the property, such as relaying an incorrect earthquake rating.
People buying an apartment or terraced house on a unit title could also opt out of settling if the vendor did not provide the pre-settlement disclosure within five days of settlement.
“Often people think in a purchaser’s situation – I’ve satisfied my conditions, so I’m unconditional, and this will settle, and that is not the case. You may have satisfied your conditions, but there can still be elements in the transaction itself or within the agreement of sale and purchase that could give the ability to cancel. But it’s all very circumstance / what happens and the nature of the contract and what has actually been agreed.”
Last month, the new owners of a $1m-plus executive home on Glaisdale Crescent, in Flagstaff, Hamilton, sold it for $721,000 after a fire broke out just a few weeks after they moved in.
- 7362 State Highway 2, in Karangahake, Hauraki, is going to auction on July 8
