Ocean City waterfront mansion to be sold at auction

OCEAN CITY, N.J. - Luxury appointments abound in the 7,000-square-foot, 12-year-old Victorian-style mansion overlooking Great Bay, such as a marble fireplace that once graced a Biddle estate mansion, a crystal chandelier that at the touch of a button lowers from the 30-foot foyer ceiling for cleaning, and boat slips big enough to berth a pair of yachts.

A "smart house" system controls window treatments, lighting, heating, air-conditioning, and music. Slate-covered turrets, little secret gardens, and gingerbread-laden porches make the exterior look more like Cape May than Ocean City.

The house, designed by architect John Olivieri and built as tight as a ship by John Bruin and John Van Duyne of the Van Duyne lifeboat dynasty, is idyllic.

But Edward and Barbara Idzik want to leave it - and quickly.

After listing the house for nearly $6.5 million and watching it languish on the market for two years without getting any serious bites, the retired couple, who are headed back to Montgomery County to be close to family, have opted to make an unusual move for luxury-home sellers: an absolute auction.

Real estate experts are recommending to wealthy clients a practice once reserved for foreclosure fire sales, a tactic known in the industry as "buzz-stoking" the market.

Saturday's luxury-home auction is indicative of the fragile state of the Jersey Shore real estate market, said Dorothy Phillips, a sales associate with Ocean City's Re/Max at the Shore, the listing agent on the property.

Prices for Shore properties declined in the third quarter of 2011, after slight increases the previous two quarters, said Kevin Gillen, vice president of Econsult Corp., which follows the regional and Shore housing markets. Investors are not "flocking en masse to the Shore," he said.

An absolute auction - unlike a reserve auction, which sets an undisclosed minimum bid - means that no matter what the top closing bid ultimately is, the property will be sold by the end of the auction, which is scheduled for 11 a.m. Saturday. The suggested minimum bid is $2 million, but bidding could start well below that figure.

Phillips said 71 homes were listed for more than $2 million in the Multiple Listing Service for the southern Shore area. Eleven $2 million-plus homes have sold within the last year, she said, and none of the sellers, so far as she knew, had to resort to an absolute auction.

Ten years ago, such a means was unheard of in the luxury market, said Michael Schwartz, an auctioneer with Premiere Estates Auction Co., a Southern California auction house and real estate brokerage handling the Idzik sale.

Bargain hunters are often intrigued by the notion of picking up a property at a substantially lower price than the original listing, he said. Owners, even wealthy ones, tired of paying taxes and the upkeep and other costs of maintaining a property can bank on an end date, he said.

While Schwartz, too, said he could cite no other recent high-profile auction at the Shore, a company spokesman said Premiere's national business for luxury-home absolute auctions jumped 30 percent in 2009 and 25 percent in 2010.

"It is a long process to get to this point, but what an absolute auction does is give the seller a definite time when that process will end. And that's what many property owners in this market are looking for," Schwartz said Wednesday as potential buyers were allowed to tour the property for the first time before the auction.

Another open house was held Thursday, and a third is scheduled for 2 p.m. to 7 p.m. Friday.

The house's current assessed value is $5 million. Property taxes on it are $36,000, and the Idziks spend about $1,000 a month on utilities.

Edward Idzik said that, although it will be hard for him and his wife to leave the charm of the Shore and make their new permanent home in a 55-and over community in Phoenixville, their needs had changed.

"We're in great health now, and we really want to move back to Pennsylvania to be able to spend more time with our children and grandchildren," Idzik said. "But we also looked down the road and had to think about how we would feel about having such a big home here five or six years from now, and that's what made us decide."

The Idziks - he is 70, she is 71 - spent summers at the Shore even before building their dream house there. They operated direct-mail and information-fulfillment businesses in Philadelphia and King of Prussia before they retired.

They have a son and a daughter and three grandchildren, ages 10, 8, and 5. Now, instead of being hours from their grandchildren's school plays and sports events, they will only be minutes away.

Idzik said he and his wife enjoyed many happy family occasions in the Ocean City house, recalling holidays and summers when the grandchildren would come down and the family would go boating or to the beach.

Phillips said friends of the Idziks who came in to take one last look at the home were crestfallen by the impending sale.

"One lady just burst into tears as soon as she walked through the front door. . . . She said she and her family had had so many good times here over the years," Phillips said.

Anyone can look at the 21-room home at 279 Bayshore Dr., by appointment or during an open house, but bidders must prequalify by presenting a refundable $100,000 cashier's check made payable to Shore Title Co.

The winning bidder must present a personal check for 10 percent of the bid, including the $100,000 registration deposit, at the close of the auction. The winner will have 40 minutes to decide whether to also purchase the house's contents, including furniture, paintings, and household items, which are being sold as a separate package for an undisclosed amount.

Before an auction, companies such as Premiere mount aggressive marketing campaigns to get the word out. They take out full-page advertisements in print publications and on the Internet, use telemarketing and direct-mail campaigns, and circulate information about the property to regional real estate agents.

Traditionally, real estate agents have not worked with auction companies such as Premiere, maintaining that such sales attract only bottom-feeding buyers. But in recent years, real estate professionals have come to see the auctions as a viable way to get their clients' homes sold.

The auction houses and the real estate companies share in a buyer's premium, a fee that the buyer pays that can range from 7 percent to 10 percent of the sale price.

"After the auction is over, the house will no longer be on the market . . . it's done. So if someone is seriously looking at the house, they know they need to be here to bid," Phillips said.

Staff writer Alan J. Heavens contributed to this article.