“Most fathers would give their kids a sand castle, not an actual castle,” said broker Weimer.

Curiously, the 6,000-square-foot main house technically has only two bedrooms, each in its own wing. The master wing includes a sitting room in a two-story tower, with a balcony overlooking the lake. The guest wing has a secret linen closet—not quite as sexy as a secret passageway, though those can be found elsewhere—along with a hand-hammered copper tub. Both come with radiant floor heating and locally sourced stone and lumber.

There’s also a two-bedroom carriage house and a two-bedroom gatehouse. So in total, this is a six-bed, six-bath spread.

It has been listed for two years—just over a year with Sotheby’s—and has gone from a $14.8 million ask down to $12.8 million. After their children had enjoyed storybook weddings at Highlands Castle, the economy faltered; the Lavenders tried to rent it out for weddings and getaways but again, town fathers stepped in. As such, Weimer doesn’t recommend buying the property as a business venture. “It’s best suited for people who own several homes and want another vacation property.”

With the kids gone, the Lavenders no longer need to live in an Upstate version of Xanadu (“It’s very comfortable inside, but at the end of the day, it’s still a castle.") The furnishings and elaborate tapestries aren’t included in the price but may be acquired in a separate transaction.

Castle Post — Versailles, Ky.
Listed for: $15 million    

Renovating a home can break up a happy marriage. It appears building a castle can, too. That’s the lore behind 230 Pisgah Pike, a 20-bed, 14-bath, 12,118-square-foot home just outside Lexington, Ky., in a town called Versailles.

According to estate agent Chad Dickerson, that's a coincidence. Local contractor Rex Martin and his wife Caroline visited Germany in the late 1960s and decided to build themselves something that evoked the castles they saw there (although this one is more King Arthur than King Ludwig). They started building what was then known as the Martin Castle in the 1970s but split up before it was finished. The Post family bought it in 2003 at auction for a reported $1.8 million and officially completed it in 2010.

Now it’s a 10-room boutique hotel, billing itself as the “Crown Jewel of the Bluegrass,” with rates from $195 to $420 a night. The 50.5 acres include tennis and basketball courts, along with a library, billiards room, game room, card room, and a banquet hall modeled after the real Versailles. Also: rooftop shuffleboard.

You do not need to keep it running as a hotel. It happens to be set in the heart of horse country, just around the bend from Keeneland Race Course and the Bluegrass Airport. Dickerson said the property's land, with grass growing atop rock formations known as karst, which makes it extra nutritious, is especially suited for raising healthy horses.