About 20 people attended the auction for 159 Lakeside Rd, but just one person made a bid, of $620,000, for the two-bedroom, 70sq m house, which has a rateable value of $720,000.
The property was passed in after a vendor's bid of $680,000.
Bayleys Wanaka director Mat Andrews, who is marketing the property and was the auctioneer, said the bidder had since made another offer and the parties were negotiating.
There remained other significant interest in the property, too, he said.
"I would expect the property to sell.
"If not, I would expect it to sell to other interested parties."
He believed the "bitterly cold day" on Saturday contributed to the lack of potential buyers at the auction.
The house is understood to have been built in the 1880s and was originally owned by Upper Clutha settlers the Templeton family.
Owen and Ellen Templeton sold it in 1982 after 42 years of ownership.
Dr Charles Briscoe, of Queenstown, has owned the cottage for the past 23 years, and has it rented to long-term tenants.
In April, a two-bedroom, 30-year-old cottage just down the road at 177 Lakeside Rd sold to a Christchurch couple for $1.1 million.
