The immaculate Tee Street home painstakingly spruced up by Terrence Smith on funds he stole from the Bermuda Housing Corporation is being hotly pursued behind closed doors.

During November, the 20-room mansion — reportedly worth $2.5 million — went before hundreds of eyes in a series of open houses and then went on the auction block last week, where bidding climbed as high as $2.2 million.

That price, however, wasn't enough for a sale because it fell short of the "reserve price", according to auctioneer Andrew Horsfield.

He encouraged bidders, including David Durham of Building Blocks Construction who placed the highest bid, to continue talks with the estate holder in an effort to complete a deal.

Mr. Durham claimed to have two partners interested in the property, but it now appears that trio is out of the running.

Since the unsuccessful bidding, mortgage lender for 21 Tee Street, Capital G, has been trying to negotiate a sale with others — skittish buyers who perhaps prefer backrooms over auction blocks.

The company will "discharge its duty to obtain the highest possible retail value," says Capital G lawyer Justin Williams, who may ultimately face a number less than $2.5 million.

Capital G CEO James Gibbons said in a written statement: "We hope to complete the sale in a few weeks."

To enter the half-acre Devonshire mansion, pedestrians take a short footbridge across a stone-lined brook running alongside a well-coifed front lawn. The full landscaping renovations ran to $173,000.

Inside renovations easily reached seven figures, evidenced in photographs — a plush six-seat movie theatre, an exquisite master bath that would make even royalty envious and wood floors and closets that bring to life the look and smell of Bermuda cedar — almost as if the blight a half-century ago never happened.

For suitors not wooed by an overt wood carved inlay on the first floor, there's also a discrete multiple camera security system covering almost every square inch of the place.

It was apparently Mr. Smith's effort to protect $1.2 million in opulence fraudulently pilfered from his community.

Today he's on the front end of an eight-year prison sentence.

Capital G, which lost about as much as taxpayers on the deal, hopes to have recovered its money long before Mr. Smith regains his freedom — scheduled for 2014.