Funny Business with Jane Wells

A Steal in Malibu at $22 Million


Even on Billionaire's Beach in Malibu, you can't escape the economy.

"We have over three years of inventory on the market," says Carol Bird of Westside Estate Agency, who's been selling homes in Malibu for over 20 years. "There are a lot of fabulous houses for sale, but they're listed at prices that are not reflective of what's happening today."

Bird recently tried something different to sell a property in the Malibu Colony. After months without any success selling it the traditional way, she experimented with an auction. It worked. Now, Cheryl Chadwick has hired Bird to do the same. Chadwick's home covers 10,500 square feet along the Pacific, with six bedrooms and ten baths, a salt water aquarium, breathtaking views, and a 75-foot long lap pool, the longest you'll find in Malibu. "The house had previously been on the market right at the bubble," says Chadwick, "then, you know, the economy fell apart."

We told you about the house last month. Chadwick originally listed it for $65 million in 2008. That price eventually fell to $35 million. The Chadwicks say they are not in any distress--they don't have to sell--they just want to move back to Chicago to be close to family. They're hoping an auction will lure in more international buyers and create a sense of urgency.

"We've seen, in the last year, over a 30 to 40 percent increase in the type of homes, the high end homes, which are being sold by us at auction," says Tony Fitzgerald, a broker with Premiere Estate Auction Company, who will be manning the gavel by the back pool Sunday at noon. Bidders must be prequalified in advance and put down a $150,000 cashier's check. If successful bidder has to put down 10 percent on the spot, plus a 7.5 percent commission for the auction house. Escrow must close within 45 days. "Auctions appeal to high end owners more because they're used to buying maybe Monets and Rembrandts at auction, or high priced Ferraris," says Fitzgerald. He claims most of the homes he auctions are, like this one, not distressed sales. One in four are.

Chadwick has been concerned that people might think she's in trouble because she's resorting to an auction. "Oh yeah, that's definitely an obstacle." But she thinks that putting notifications of the auction in the International Herald Tribune and The Wall Street Journal have helped get the attention of international buyers. While we were reporting from the house Monday morning, a broker came by to say she had a client who might be interested in buying. Chadwick can close a deal before Sunday and cancel the auction. Even if the auction happens and the minimum bid of $22 million is met, that doesn't mean the deal is necessarily sealed. The Chadwicks have a secret reserve price below which they can reject any offer.

Will the home sell? A recent auction of a stunning property in Seattlefailed to sell at auction.  If Chadwick doesn't get what she wants Sunday, "Then we stay here and continue enjoying our life."

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