010316-mis-nws-island-lodge (copy)

The Montana Island Lodge on Sourdough Island in Salmon Lake is shown in this 2016 file photo.

A Realtor who sold the Montana Island Lodge last week for roughly $1 million less than its lowest asking price — and $5 million less than the original price — is on probation "for unprofessional conduct."

On Oct. 26, 2017, the Montana Board of Realty Regulation placed Cole Bergquist on probation and issued two final orders against him in two separate complaints filed with the Montana Department of Labor and Industry. In one case, Bergquist marketed a property another realtor had an agreement to list, and in the other, he inappropriately circumvented the listing agent, according to the orders.

The board fined him $1,000 in one case; in the second order dated Oct. 26, it placed his license on probation "for a period not less than two years."

Bergquist and business partner Rebecca Donnelly with Christie's International Real Estate sold the Salmon Lake lodge on behalf of the University of Montana Foundation. Friday, UM Foundation CEO and President Cindy Williams said the foundation did not know about the disciplinary actions.

"(It's) interesting that Christie's did not let us know," Williams said.

Earlier in the week, Bergquist and Donnelly talked with the Missoulian about marketing and selling the island and lakefront property that had been donated to UM. Bergquist later addressed his conduct in the industry and said the board has no unresolved complaints pending against him.

On the contrary, he said in an email Saturday that his record has been stellar.

"In 2016, I was the highest producing agent in the Montana Regional MLS and conducted successful transactions with over 50 other agents/peers. One of those transactions also happened to be the highest sale in our entire MLS, at close to $8 million," Bergquist said.

The team hired to sell the unique island and lakefront property discussed some of the reasons the property sold at $1.6 million, the highest offer a foundation official said UM received, but lower than the most recent $2.5 million listing price and much lower than the earlier $6.5 million price tag.

Bergquist, Donnelly and another broker of luxury properties in Montana talked about some of the strategies used in marketing high-end real estate. By several accounts, this particular lodge posed challenges because it was outdated, in need of repairs, and inaccessible a couple of months of the year.

"It's hard to price an island because there's not a lot of comparable properties," Bergquist said.

However, the complaints made by two other Montana real estate brokers raise the question of whether Bergquist's dealings in the industry affected any negotiations.

"I think my success over the last few years speaks to the fact that other Realtors are willing to work with me," Bergquist said in an email.

He said agents have the responsibility and desire to represent their clients' best interests at all times: "If a property fits their clients' needs, they will certainly show it. Additionally, Realtors all work on a commission basis. On a property of this scale, personal differences will be set aside."

Donnelly also said she did not believe her partner's reputation negatively affected the final price.

"Honestly, absolutely not," Donnelly said. "I think if you've got a buyer that's interested, they are going to make sure they see it. They're not going to opt out of viewing a property because the listing agent may or may not be on probation, in my opinion."


The Business Standards Division of the Montana Department of Labor and Industry provided the Missoulian two disciplinary cases and orders in relation to Bergquist.

In one complaint filed in November 2016, Ric Smith alleged Bergquist tried to directly negotiate with Smith's client. But Smith and the seller had entered into an exclusive listing agreement, the board record said.

Smith is listed as a broker/owner for Century 21 Big Sky Real Estate in the Flathead area.

According to board documents, Smith had previously marketed property on behalf of the seller. In January 2016, before signing an agreement, the seller contacted Bergquist about his ability to market the property, the stipulation said; they exchanged emails "over the next several months" about a possible listing.

But the seller decided to work with Smith, and on April 25, 2016, Smith began listing the property, the stipulation said. The following day, Bergquist contacted the seller to ask if the property he'd seen was the one they had discussed, and on April 27, the seller confirmed it was, the board record said.

"Seller further noted he would reconsider the listing in June (2016), upon his return to Montana," according to the stipulation.

On May 2, 2016, Bergquist again contacted the seller asking when his listing with Smith expired, saying he "had a buyer for the property." On May 10, he told the seller the buyer wasn't interested anymore, but Bergquist believed he could have it under contract in one month with better marketing, the stipulation said.

In response to a question from the seller the following day, Bergquist said he thought he could sell the home in 60 days if it was listed for $20,000 less, and he criticized the marketing photos being used.

On July 23, Bergquist showed the property to a prospective buyer, and two days later, he asked the seller if he would be willing to pay more than the 2.5 percent commission, the stipulation said. In doing so, Bergquist circumvented Smith: "Complainant (Smith) did not authorize respondent (Bergquist) to contact seller."

The seller had extended the listing agreement with Smith: "Respondent (Bergquist) had communicated with seller prior to the listing agreement and was aware complainant (Smith) held the exclusive listing agreement," the stipulation said.

The stipulation said Bergquist responded to the complaint in January 2017 and said he had a history with the seller and therefore felt justified directly asking for additional compensation.

The board disagreed Bergquist's action was justified and fined him $1,000. Smith is chair of the realty regulation board but said he abstained from any decisions related to Bergquist in both cases; he declined to comment further on either complaint.


In a separate complaint, Bill McDavid alleged Bergquist advertised property in the Hamilton area without a valid listing agreement, according to the public records. According to the board record, McDavid had a listing agreement for the property and filed a complaint in February 2017.

McDavid is listed as a partner with Hall and Hall, a real estate company that aims to promote land stewardship and touts more than a quarter-billion dollars in annual sales.

Board records note the property owner gave Bergquist "a one-time showing agreement" for a specifically named party for the fall of 2016.

In November 2016, though, Bergquist sent a mass email showing the property as a "significant listing" for $5.65 million, and then in January 2017, he sent another email showing the property as one of his listings, according to the board record.

He removed the property after McDavid told him he had an exclusive right to list it. In a phone conversation between them, though, Bergquist told McDavid he had a listing "through 2018."

McDavid asked if Bergquist's supervising broker had signed the contract, and he called supervisor Dawn Maddux to see if she had signed a listing agreement for the property, the board record said. It said Maddux asked Bergquist for the listing agreement, but he said he didn't have one.

The order puts Bergquist's license on probation, a sanction that took into consideration the disciplinary fine. It also requires his supervising broker to submit reports every six months of the realtor's listings, transactions, and compliance with real estate statutes.

In a brief phone call, McDavid said he has never filed another complaint to the regulatory board: "I have been in the business for 25 years, and this is the first time I’ve ever filed a complaint against any one. The only time."


Bergquist was a UM Grizzlies quarterback from 2005 to 2008, and state records list two addresses for him, one in Missoula and one in Laguna Beach, California.

UM Foundation CEO Williams said the foundation hired him and his partner to sell Montana Island Lodge roughly a couple of years ago but worked mostly with Donnelly.

When reached for comment on the disciplinary actions against her partner and how they might have affected the lodge sale, Donnelly asked to first contact her supervising broker. She returned the Missoulian's call and also included PureWest Christies' President Scott Strellnauer.

Strellnauer said he did not believe Bergquist's dealings with other Realtors outlined in the complaints might negatively have affected the lodge sale: "I don't think it was widely known. I don't think people investigate that previous to taking a look at a listing. It's not really how that works."

Rather, he said a client who is interested in a property such as the island lake lodge will pursue it.

"I think the things that are more pertinent to the sale of that property have more to do with perceived value based upon its condition, its location, and time on the market," Strellnauer said.

He said Christie's will disclose disciplinary actions if the matter is pertinent to that particular client, but in this case, the board only placed Bergquist's license on probation.

"He didn't lose his license. He wasn't suspended. He didn't get fined," Strellnauer said; he admitted he hadn't remembered the $1,000 penalty the board levied against Bergquist.

Christie's counts roughly 170 realtors in Montana, he said, and he believes the number on probation is one: "Probably just Cole."

He said he hasn't been made aware of any unresolved complaints against Bergquist.


In one complaint, Realtor Katie Ward of Christie's was listed as one of Bergquist's supervisors, and in a phone call, she described him as "a superstar." She also described the complaints against him as "extremely minor."

"We recruited him for months before he joined," Ward said. "I've been in real estate 20 years, and Cole and Rebecca are the hardest working and most professional agents I've ever been around.

"They do a phenomenal job in the luxury market, which is the most difficult market to be in, in my opinion."

Maddux is named as an earlier supervisor of Bergquist in the complaint. She supervised Bergquist at Glacier Sotheby's before he went to Christie's but declined to address whether he had been asked to leave Sotheby's.

However, Maddux also sells luxury properties, and she shared insights about why a lodge might be sold for less than appraised.

Currently a managing broker with Engel & Volkers, Maddux is also marketing Montana Shelter Island on Flathead Lake for $22.75 million, an island property albeit one in a different league than the site UM sold. Several years ago, Shelter Island was on the market for $78 million.

Maddux said an 18,000-square-foot lodge like Montana Island Lodge is expensive for owners. For one thing, large establishments often need full-time caretakers, and that's just the beginning.

"Just imagine. You've got to keep the plumbing going or the pipes could freeze. You've got to keep the heat on. Sometimes, people get to a point where it's just not worth it. It makes more sense to get out of it," Maddux said.

At times, she said those maintenance costs mean it makes more sense to sell even at a price that's lower than an appraised amount. In 2016, a UM finance vice president estimated the campus had put $1 million into maintenance in 18 years, or some $55,000 a year.

On the other hand, Maddux also said with a $1.6 million offer in hand, she might have recommended the seller decline and drop the price to $2.2 million to try to procure another offer instead of accepting one so low. Doing so might have garnered another $500,000.

Generally, she said, selling a unique luxury property for its full potential requires "a ton of research," an experienced broker, the ability to identify potential buyers in a global market, and willingness to spend money on marketing.

"I have tens of thousands of dollars into marketing Shelter Island. That's what it costs to be in this category of listings," Maddux said.


Donnelly said she isn't afraid to spend money on marketing either, and Bergquist said the uniqueness of the property meant he and his partner knew they needed to leave "no stone unturned" in their search for the right buyer.

"The Montana Island lodge was first listed with another firm several years ago with no success," Bergquist said in an email. "Even with our industry-leading marketing, we’ve only had three offers in the last two years. All three offers were very close to each other and that warrants the sales price. I feel the U of M foundation did a superb job in dealing with a difficult asset."

He declined to address the reason he didn't disclose disciplinary actions and his probationary status to the UM Foundation.

All the same, this property posed particular challenges, said Donnelly and Bergquist. It needed more than maintenance, and they said it's possible the land might have sold more easily without the structure, a residence with some 11 bedrooms.

"Properties like this with so much square footage aren't really the most popular right now," Bergquist said.

A smaller home with larger living area and nicer finishing might have had more appeal for a family, as would the opportunity to custom-build a residence from scratch, he said. In this case, he and Donnelly estimated that the minimum maintenance required would cost anywhere from $250,000 to $500,000 for cosmetics alone.

In order to make the property competitive against some other resort lodges, though, it may have needed some $5 million, the Realtors said. And Donnelly said some buyers who were considering the purchase as an investment property had to factor in its inaccessibility a couple of months out of the year, and the numbers didn't pencil out with that lack of revenue.

The team marketed the property at home and overseas, to individual clients and to organizations such as the Rocky Mountain Elk Foundation, and Christie's featured it in a blog that was pushed to thousands of agents in the United States and abroad, they said.

A winter 2018 issue of Vogue comes out with a spread on the property, said Donnelly, but once they had offers, it didn't make sense to wait for the publication. Donnelly and Bergquist had been hearing whispers of interest in the property, and the amounts they heard potential buyers were willing to pay weren't as high as the final price, said the partners.

Generally, properties offered at more than $1 million aren't selling close to their listing price, said Bergquist.

In this case, he said two potential buyers came in at once in a competitive sale: "It did significantly increase both of their offers."

And the one from the Lipsons, who own the Resort at Paws Up, was a solid offer, Donnelly said: "Because it was significantly better than anything else that had come up or had been talked about, I think we felt it was a good idea to take the offer that was in hand."

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