The light-filled, Caribbean-style home that recently hit the market in Palm Beach, Fla., has everything wealthy buyers covet.
The waterfront, 10-room estate includes 22-foot-high beamed ceilings, terracotta tile floors and a ground floor surrounded by lushly landscaped atriums. Even Its $8.5 million price tag is, by Palm Beach standards, appealing.
Yet the home has another distinctive feature. It was owned by notorious Wall Street swindler Bernard Madoff. The disgraced financier and his wife, Ruth, turned it over to federal marshals along with two other properties to be sold in order to help compensate victims of Madoff's $65 billion Ponzi scheme..
"It's an excellent property," says James Reynolds, a veteran Florida real estate broker who is not connected to the property's sale. "But would you really want to live where Bernie lived?"
From the Brentwood, Calif., home where Nicole Brown Simpson was murdered to the Hamptons, N.Y., estate where Peter Cook, the husband of former supermodel Christie Brinkley, was found having an affair with a 19-year-old employee, homes tainted by gruesome murder, high-profile sex scandals or messy tabloid divorces are a tough sale, say property experts.
Real estate professionals call them stigmatized properties, and trying to unload them under the best of market conditions can be tricky. But with many areas still reeling from tanking sales, these homes pose an additional challenge to sellers as buyers have their choice of more properties.
"The home could be in great condition and priced really well," says Greenwich, Conn., broker Chris Fountain. "But there will always be people who just don't want to live there."
Fountain should know. Two years ago he tried to sell the red brick mansion rented by real-estate mogul Andrew Kissel in Greenwich. The property developer had been renting the home in the leafy Manhattan suburb for $15,000 per month when he was found bound, gagged and stabbed to death inside it in 2006.
Though it sat on 2.1 lush acres on a quiet, tree-lined road, the four-bedroom home languished on the market for more than a year at a price of $5.2 million.
The owner eventually had the home razed and replaced it with a stone-and-shingle mansion. The new home hit the market in September 2007 and still hasn't found a buyer -- despite a price cut from $10.7 million to $8.4 million.
There are different degrees of stigma, of course. Appraisers and brokers say murder is by far the toughest kind of notoriety to minimize, in particular multiple homicides and cult killings. Suicides and hauntings come next, followed by illicit sex and celebrity infidelities.
When celebrities aren't involved, sex scandals appear to have little impact.
A couple of examples from Los Angeles in the 1990s underscore how the taint of murder can exceed that of a sexual scandal. The Brentwood, Calif., home where Nicole Brown Simpson and Ron Goldman were murdered in 1994 hit the market the following year with a $795,000 price tag. It sat on the market for more than two years before selling for $595,000, public records show.