The owners of a South Auckland home destroyed in a house fire are auctioning off their fire damaged property with a $1 reserve because they cannot afford to rebuild it.
The uninhabitable three-bedroom, one-bathroom home at 408 Roscommon Road, in Clendon Park, is going under the hammer at the end of the month and is one of several properties currently for sale in both Auckland and Hamilton that are literal fire sales.
Ray White Manukau co-owner Tom Rawson said the sellers, who lived in the property for 30 years, decided to let the market decide what the house is worth in its current “as is” condition. The house was uninsured and the couple cannot afford to build a new home on the site.
He expects the $1 reserve will draw a lot of attention including from people wanting to pick it up for a steal, but in his experience these low reserve properties usually sell for what they are worth.
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“It’s good that the owners have realised that they don’t know what it’s worth because it is pretty unique when a house catches fire and is a right-off to be able to sell it so they’ve gone ‘we will trust the market, trust the auction process and we will put a $1 reserve on it’.”
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The property's CV of $860,000 is irrelevant, Rawson said, because the house isn’t there anymore and even the Land Value of $820,000 might be a bit high as the cost of removing the existing house of the site also needs to be factored in.
“Yes, you will have competition because it’s a $1 reserve so you will have people come in and low ball which is perfectly acceptable at a $1 reserve. It will ultimately reach the market value for what it’s worth – the land plus a house that needs to be removed.
“I wouldn’t be surprised if this doesn’t make half a million dollars realistically land value and you’ve got to scrape off the house and any contaminants maybe as well.”
Rawson said it will be a bargain for someone and expects it to attract a builder or a house relocator who could scrape off the damaged dwelling and put in a relocatable home that is being moved off a nearby site.
“I would say it’s not for the faint hearted, but it is for those that can see opportunity and create opportunities and someone who buys this will come in with a plan.”
A fire-damaged home on Waipapa Crescent, in Otara, Auckland, sold under the hammer for $520,000. Photo / Supplied
Last year, his agency had six fire sales, but so far this year they have already listed three.
Ray White Manukau is also marketing a group of three commercial shops on the corner of Gloucester Road and Browns Road, in Manurewa, which have also been struck with fire, smoke and water damage and needs a new owner to either repair, expand and re-lease or completely rebuild it.
And a canny investor snapped up a fire damaged property on Waipapa Crescent, in Otara, for $520,000 at its auctions last week.
The 673sqm section had two houses and a separate garage, but the large house had been destroyed by a fire and was uninhabitable. The smaller three-bedroom property had existing tenants who wanted to stay on.
There were nine registered bidders interested in the property. The auction opened at $500,000 before selling for $520,000 to someone who had the skills to do it up.
Meanwhile a 1920s Hamilton character home on Rifle Range Road, in Dinsdale, which was damaged in two separate fires, sold in a mortgagee auction this week for $411,000 after attracting eight bidders and 52 bids.
This character home on Rifle Range Road, in Dinsdale, Waikato, sold for $411,000 after attracting 52 bids. Photo / Supplied
Harcourts listing agent David Forster said the property was first damaged in January 2021 and caught fire again in its derelict state at the end of last year.
The photos show a number of windows either missing or boarded up, doors stacked up on front of the balcony in front of a blackened and sometime non-existence exterior.
A separate double garage at the back of the section undamaged by the fire remains.
Forster said the 625m² freehold corner site will most likely to attract developers who could build a duplex or possibly even subdivide it into three smaller freehold sites.
“It would lend itself to a replacement single dwelling being put there, but realistically the most value is in the land as a development site.”
While a lot of the buyers often have the perception that they are going to get a bargain especially as it is being marketed as both a mortgage and fire sale, he said this isn’t always the reality.
“I’ve been doing mortgagee sales for a long time and I reassure people that the banks have got the responsibility to sell it for as much as possible.”
A derelict home at 42 Wymondley Road, in Otara, is also being sold for $750,000 and, according to the Universal Realty listing, requires “urgent action” after being badly damaged in a fire.
“Inheritance gone wrong, the nest egg is now a problem they need solved,” the ad said.
- See more houses for sale in South Auckland
