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.
Tom Rawson, co-owner of Ray White Manukau, says the owners, who have lived in the residence for three decades, have chosen to allow the market to determine the property’s current value in its present “as is” state. The residence was not insured, and the couple is unable to afford to build a new home on the property.
Rawson anticipates that the $1 reserve will pique the interest of many potential buyers, including those seeking a bargain, but his experience suggests that these low reserve properties typically sell for their true value.
“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’.”
According to Rawson, the property’s Capital Value (CV) of $860,000 is insignificant since the house no longer exists, and even the Land Value of $820,000 may be overstated, as the expense of demolishing the previous structure from the site must also be considered.
“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 believes that the property will present an excellent opportunity for someone seeking a bargain, and he anticipates that it will attract a builder or a house relocator who may remove the damaged house and replace it with a relocatable home that has been transported from a nearby location
“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.”
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.
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