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Real Estate Center

Aug 31, 2009 5:02 PMPublication: The East Hampton Press & The Southampton Press

Selling houses with history

Aug 31, 2009 5:02 PM

In the declining real estate market, local brokers are finding even the most lavish and beautiful homes difficult to sell. But some properties present much greater challenges than others, particularly those with a less than happy history.

When federal officials gave word this summer that convicted swindler Bernard Madoff’s oceanfront home in Montauk would be liquidated to pay back his victims, East End brokers immediately began jockeying for the $7 million listing.

Even though Mr. Madoff reportedly fleeced $65 billion from thousands of investors—destroying lives and crippling families in the process—many brokers believed his five-bedroom house would be an easy sale. Since oftentimes infamy brings notoriety and interest, the prime beachfront listing seemed to be a no-brainer for hungry agents waiting to feast on the public’s insatiable curiosity.

A handful of potential buyers may be uncomfortable living in the notorious criminal’s former abode, but not most, according to Richard B. Maltz, a partner and broker

for David R. Maltz & Co. Inc., a company that auctions $100 million worth of foreclosed, bankrupted and seized properties across the country each year.

“People just love the ability to get a deal,” he said, noting that property value can fall due to a less than savory previous owner, but “it really depends on who the person is.”

Mr. Maltz is not selling the Madoff house, but he recently sold a property that the Justice Department seized from a different crook in Montauk and it fetched above market value at $2.5 million.

“This was a bad guy,” he said of the owner. “But nobody was turned off by the fact that he owned it.”

On the other hand, Mr. Maltz said it’s much harder to sell homes of convicted murderers. He said that values will typically decrease in that situation.

Mr. Maltz noted that his company uses the auction method of marketing, which creates a sense of urgency, which ultimately leads to a sale at fair market value. “People get caught up in the excitement of an auction,” he said.

In some cases, the provenance of a house—who owned it and what happened there—can hurt its marketability. Then again, it can also be the very thing that clinches a deal, explained Judi Desiderio, a broker with 27 years of local experience and the owner of Town & Country Real Estate.

Ms. Desiderio signed a nondisclosure agreement that precluded her from specifically discussing the Madoff parcel, but she noted that her firm has encountered houses with both positive and negative history.

“There’s good houses and bad houses,” Ms. Desiderio said, adding that a home’s connection to a high profile criminal can be intriguing to some buyers, while others won’t set foot inside. Town & Country has marketed properties based on their attractive provenance, but the firm has also faced the obstacles of selling or renting those with a more grisly past, she said.

In October 2001, successful financier and investment banker Ted Ammon was found naked and bludgeoned to death in his Middle Lane mansion in East Hampton. After his widow, Generosa Rand Ammon-Pelosi, died of breast cancer in 2003, Ms. Desiderio landed the exclusive listing.

Ms. Ammon-Pelosi was a suspect in the murder case and her lover (whom she later married), electrician Danny Pelosi, was convicted of the brutal murder. The sensational case was eaten up by the mainstream media and was eventually featured on several television shows and adapted into a made-for-television-movie, “Murder in the Hamptons,” in 2005.

“Ammon has been my exclusive since the beginning,” Ms. Desiderio said, noting that she’s rented it every year without fail. But that’s not to say it was always easy to market the property.

Because of the intense interest in the case, clients had to be qualified before touring the house, she said, noting that gawkers and members of the media attempted to get an intimate look at the six-bedroom manor. “We did turn people away,” Ms. Desiderio said, adding, “It made it challenging, but it wasn’t an insurmountable challenge.”

Due to the case’s high profile, there was never any question of whether or not tenants would know or should be informed about what occurred in the Ammon house. But the history of most properties with less than stellar pasts are oftentimes much less public.

Southold broker and real estate professor at New York University and Long Island University John Viteritti said that New York State’s real property law specifies that any property that is or is suspected to have been the site of a “homicide, suicide or other death by accidental or natural causes, or any crime punishable as a felony” is “stigmatized.” In spite of the ugly term, brokers are required to disclose the information only if they know about it and a buyer inquires, according to the law.

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