Montauk - Bernie Madoff's oceanfront beach house in Montauk is for sale for $8.75 million according to federal marshals who listed the property with the Corcoran Group this week.

Bernie Madoff, the 71-year-old former financier, prior to his investment scandal.

The feds plan to sell the beach house along with Madoff's Manhattan penthouse and his home in Florida to recoup a small portion of the $60 billion Madoff acquired by defrauding thousands of investors in what is believed to be the largest Ponzi scheme in history. Madoff estimated the value of the penthouse at $7 million, while he valued the Florida home at $11 million in estimates filed by federal regulators last year. Other estimates place the value of the home in Florida at $9.4 million. The 71-year-old former financier is serving a 150-year sentence in a federal prison in North Carolina. According to some reports, he is in poor health.

The Montauk property is listed with Raymond and Joan Hegner of The Corcoran Group. Hegner indicated she does not intend to play up the Madoff connection as she tries to sell the property. The husband and wife team were selected to handle the sale after federal marshals issued a notice to real estate agents in the area in July - when they seized the property - searching for brokers to handle the transaction in conjunction with LPS Asset Management Solutions. The asset management firm contracts with the federal government to handle residential real estate sales. The federal marshals widened their search for brokers qualified to handle the sale in an effort to maximize the return on these properties. The federal marshals noted the unusual circumstances surrounding the sale of all three properties as well as the need to compensate the victims of Madoff's fraudulent investment scheme as fully as possible.

Agents interested in handling the sale were asked to fill out a lengthy questionnaire. Their proposals were not to exceed 10 pages. LPS evaluated the applications. Their final decision was based on experience and market knowledge. Applicants were asked about the proximity of their office to the property, and were asked to provide information about celebrity listings and sales they had been involved with. The prospective listing agents were grilled on their sales records. LPS reviewed the number of transactions in excess of $4 million made in the last two years by agents interested in listing the Madoff property. Agents were asked to outline their sales and marketing strategy and provide a detailed advertising budget as part of the selection process. Applicants had to submit copies of their brokers and sales agents licenses too.

The fireplace made from stones gathered on the beaches of Montauk goes from floor to ceiling.Interior and exterior images courtesy of The Corcoran Group

Brokers familiar with the market have placed the value of the house at $7 million. Madoff estimated the value of the home he has owned since 1980 at $3 million when prosecutors asked for a list of his assets. The Madoffs moved in shortly after the house was built and are the only owners to have occupied the property. Hegner pointed to the home's location, a scant 50 feet from the shoreline, as a value add, noting current zoning and environmental regulations prohibit construction that close to the shoreline.

The 3,000 square-foot home located at 216 Old Montauk Highway sits at the end of a long driveway on a spectacular 1.2 acre parcel of prime oceanfront property with 182 feet of private beach just outside its doors. The house has an in-ground pool with an ocean view.

The rustic contemporary home has nearly unsurpassed ocean views from every room. The master bedroom on the second floor has a walk-out balcony that faces the ocean. A floor-to-ceiling stone fireplace made with stones gathered from the beaches in Montauk dominates the living room.

The house has an open floor plan and vaulted ceilings befitting a truly casual beach house. The four bedroom house has three baths and no garage, a fact that was not lost on the hoards of reporters invited to tour the house by federal marshals this week when it was introduced to the market on Sept. 1. Reporters bemoaned the lack of walk-in closets and described the furnishings as ordinary and even shabby.

Many were disappointed at the relatively modest size and simplicity of the house given the scale of Madoff's wealth. One magazine account described the house as "tacky", others were surprised that the house was "less than palatial." Madoff's penthouse was not outsized either at 3,000 square feet.

Brokers questioned the wisdom of listing the property now as the Summer is drawing to a close, while others speculated the property would remain on the market a long time. Some estimated it could take more than two years to find a buyer in a luxury market saturated with unsold listings. Others hoped a buyer would materialize over the weekend.

The house has panoramic ocean views from every window in every room. Brokers point to the value add of the home's location, a scant 50 feet from the shoreline and the dunes. Current zoing and environmental regulations would make it impossible to build so close to the beach again.

The Madoff's purchased the house for $250,000 in November 1980, when the deed was recorded. East Hampton Town public records indicate the house has a total market value of $3 million. Taxes on the property are $15,000 and change.

The federal marshals plan to sell the Madoff's personal belongings too. Proceeds from the sale of these personal items, including Ruth Madoff's shoes and 17 beach towels, will be used to provide restitution to Madoff's victims. A set of golf clubs, some furniture and the Madoff's dishes and cutlery will also be sold.