Madoff's Montauk home: Meet the broker

Montauk broker Joan Hegner is showing the most unusual property of her career: the vacation home where Bernie Madoff's fishing rods now sit idle.

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By Nina Easton, Washington editor

Corcoran Group broker Joan Heger is the exclusive sales agent for Madoff's Montauk house.
Inside Madoff's beach house
As the government prepares to put Bernie's Montauk home on the market, a U.S. Marshal gave the press a tour of the house. Here's what they saw.
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NEW YORK (Fortune) -- The personal detritus of Bernie Madoff's vacation life sits with hand-written, neatly numbered FBI tags-the surf-casting rod he used in his backyard beach to catch striped bass and blue fish, the Life Cycle exercise machine sitting idle in his upstairs bedroom, the wooden duck decoys on the foyer table, the couches and chairs and lamps and clothes now sitting in boxes unremarkably labeled "men's clothing" and "women's clothing."

But none of these eerie reminders of the 71-year-old man who stole $65 billion from his clients is real-estate agent Joan Hegner's problem: U.S. Marshals will soon cart off all the Madoff family items to be auctioned to the highest bidders.

Hegner's charge is to get top dollar for the two-story contemporary beach house with pool nestled on a beach in Montauk, N.Y. "I feel tremendous responsibility to realize the best we can," says the blond Corcoran Group broker, a 32-year veteran of the Montauk real-estate market. (Disclosure: Hegner also acted as my agent in renting a vacation house.)

She has tailored her sales pitch for this job, by far the oddest she has ever encountered, even in a community dotted with capricious celebrities.

"Whoever buys this home will help reap benefits for the victims," she insists, a reference to the decades-long Ponzi scheme that landed Madoff in prison and left many of his clients flat broke.

Madoff's Upper East Side apartment and Palm Beach house are also going on the selling block, though none of the real estate will put much of a dent in the billions he bilked.

If the crime had been murder, the shingled beach house on Old Montauk Highway would surely have been a tougher sell. But snagging the vacation home of the biggest swindler in history carries a certain trophy value in the label-conscious world of New York real estate.

Serious buyers only. In the four days since Hegner landed the $8.75 million listing, more than a dozen prospective buyers have walked through, and two bids have been submitted. More viewers are piling in this week. "We have people coming from Florida, from Germany," she says. "Since Tuesday, it's been bedlam. My poor dog is so neglected."

The voicemail on her cell phone, as well as that of her partner/husband Raymond, directs interested callers to a separate line, which has been inundated with calls.

Casual viewing is verboten. Anyone who wants to see the property must provide financial evidence that they are qualified buyers. Hegner herself went through a rigorous six-week competition, run by a U.S. Marshal-selected management company, to land the listing. She and her firm are donating their share of the commissions to a fund for the Madoff victims.

There's plenty of skepticism around here that Hegner can get the asking price-let alone top it. The place is gorgeous but dated. There's a Sub-Zero refrigerator, but the kitchen counters are Formica-giving it that state-of-the-art, circa 1981 feel.

The two-story vaulted ceiling can't hide the fact that the house is small for the asking price. It's an intimate place-suggesting that Madoff and his wife Ruth came here to relax with family, not produce the kind of lavish entertainment spread common to New Yorkers vacationing in the Hamptons, 20 miles closer to the city.

But Hegner is a pro: her sales pitch dwells on the fact that the house was built prior to Montauk's strict zoning regulations, so it sits right on the beach, 50 feet from the crest of the dune, much closer than would currently be allowed. Standing on the back portico, you can taste the sea-spray as you head toward a sparkling plunge-pool.

Inside, a dramatic stone fireplace -- where Madoff's fishing rods now lean-is upstaged by the ocean views that dominate nearly every room.

Montauk -- a hot spot. The house, Hegner notes, was built by David Webb, a favorite among Montauk glitterati at the time. It's private rather than flashy; even though the address is directly on an ocean highway, it sits at the end of a long driveway without views of neighbors.

Anticipating multiple bids on the property, the U.S. Marshal service plans a kind of "silent auction," a rare but not unprecedented system used on special private residences, in which bids are collected and top prospective buyers will quietly be encouraged to bid upward.

The winning buyer will get to count Ralph Lauren and Robert DeNiro as Montauk neighbors. On the other side of town, fellow beach combers include singer Paul Simon, artist/filmmaker Julian Schnabel and photographer Bruce Weber. J.Crew CEO Mickey Drexler bought a five-acre compound for about $23 million two years ago.

Montauk, sitting on the easternmost point of Long Island, is known more for shark fishing and blue-collar beach motels than the chic of the Hamptons. Local protests have erupted over the appearance of celebrity destinations like the Surf Lodge, the kind of place that feeds tabloid gossip columns.

Despite its determined downscale image, though, the upper-end real estate market here is still going strong, seemingly resilient to the financial crisis. Hegner is in negotiation on the sale of two properties, one at $5.9 million, the other at $4.6 million-and they aren't even oceanfront. Another nine properties in the $1 million to $2.5 million are on their way to closing sales.

Buyers interested in the Madoff house better act fast. "We don't want to linger long," she says. "The government wants to get these properties sold." To top of page

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