Agent LJ Hooker Batemans Bay spruiked the property, which sits on a generous corner block in Catalina, as "arguably the cheapest house in the bay".

Eurobodalla Shire Council has no demolition order on the dwelling but, due to its rundown state, the buyer needed to pay cash as the bank wouldn't provide a valuation - which made securing finance difficult.

Surprisingly, selling agent Karen Van Der Stelt said the developer would renovate the house, which has sat vacant for 20 years.

"The front steps made me really nervous walking up them," she said.

"We had three local builders that said they'd just knock it down and put up a duplex.

"We had a few other builders say if they were doing it themselves they'd give it a go but it was certainly not for the faint-hearted."

Built as a holiday home but never finished - the house had been leased many years ago. The owner has since developed dementia and Ms Van Der Stelt said she received a call from relatives, acting as the owner's power of attorney.

"When I rang the council, because we obviously get the rates and check everything before we list it, they were like 'which property?'" she said.

"I told them and it was like this little light bulb going on. No one knew who owned it and they've lost contact with the owner, everything (mail) returns.

"Everyone's driven past it. The thing's been falling down for 20 years."

Once the rates were back paid, the listing went up on October 22 but despite receiving more than 15 offers, gaining finance from the bank became an issue - turning it into a cash sale.

After months of little movement Ms Van Der Stelt said when the property featured on Domain and in the Illawarra Mercury things began to kick off.

"Then it got picked up and went viral and everyone wanted it," she said. "I was getting calls from Victoria.

"They actually did get an offer higher than the $400,000 it sold for but they knocked it back because it was subject to borrowing a little bit of finance and this other one just went 400 cash, immediate exchange, immediate settlement."

The sale comes as the Batemans Bay property market is amongst the worst performing in the country.

According to CoreLogic's February Regional Market Update, the Bay had the lowest annual growth (-5.8 per cent) and the longest average stretch for property on the market (75 days). Rental growth was down more than 10 per cent for the year.

The median value of a dwelling in the region is $723,936.