Make Your Home a Grand PrizeAs selling a home in today’s market becomes more and more difficult, some sellers are opting to give their homes away.
But not for free, of course. Sellers know that their homes are prizes, so they treat them that way. Sellers across the country are trying out home lotteries, in which they hold a contest and give their homes to the winners.
In Red Feather Lakes, Colo., J.J. Rodgers decided to sponsor an essay contest to sell her home after it lingered on the market for three summers in a row. Her goal is to collect 2,000 entries -- each with a $100 entry fee -- to rake in $200,000 to pay off the mortgage, cover closing costs and have a bit left over.
A similar contest cropped up in Yachats, Ore., where Ray Sinclair attempted to sell his beach home with an essay contest. Each entrant submitted a $200 entry fee and an essay of 100 words or less on the topic “Why I Want This Home.” He hoped to receive 3,000 essays.
But for both Rodgers and Sinclair, collecting enough entries has been a barrier to a successful home lottery. On July 8, Sinclair officially closed his contest and promised to refund all entry fees. Conditions look grim for Rodgers as well, who finally closed her contest on July 14 after multiple extensions. A winner is supposed to be announced on July 21, but on the Colorado Home Essay Contest Blog, Rodgers says she will most likely not receive enough entries.
Another difficulty with this sales tactic is that home lotteries are illegal in most states. Some states allow them, but the proceeds of the sale usually have to benefit a charitable organization. John Artimovich, a builder in Orlando, Fla., started a nonprofit charity called Sons of Toil after he was unable to sell his $1 million home. He is now holding a raffle contest both to pay for the home and to benefit the charity.
In Florida, cancelling a raffle for a charitable organization is illegal, so Artimovich will declare a winner in October no matter how many raffle tickets are purchased. He hopes to build and raffle off one new home per year.
For sellers considering selling a home by lottery, talk to a real estate lawyer first to make sure the deal is legal. For buyers hoping to be the lucky winner of one of these abodes, keep in mind that the entry fee won’t be your only expense -- you’ll still have to pay income and property taxes on the home.