A couple bought a country farm, planning on paying off the new mortgage when they sold their previous home. Unfortunately, their old home didn’t sell. They decided to sell their farm, but with the market continuing its slump, the farm would not sell either.
With foreclosure looming, they decided to try something radical–a raffle. “Tickets would go for $100 each, and one lucky person would win the farmhouse. If they could sell enough tickets, they could walk away debt-free.”
Others are venturing out on this extraordinary experiment. “Instead of selling it to one person, we’re going to try to sell it 31,500 people,†said Tom Walters, . . . referring to the number of $50 tickets he must sell to cover the house’s appraised value, a $10,000 second prize and earnings for a charity. Mr. Walters, a mortgage broker, bought the house in 2006 and completed a 4,500-square-foot addition in June. But his career has suffered as a result of the mortgage crisis, he said, and it has lately become “impossible†to borrow on the house. “It’s been a perfect storm of bad real estate mojo,†he said.
“Home raffles are hardly an easy proposition. Gambling regulations in many states make holding a private raffle for a house or land illegal unless the homeowner has a nonprofit organization as a partner, and the homeowner cannot make more than the appraised value of the house. (Some states, including New York, forbid even nonprofits from raffling off a home.)”
I would not recommend a raffle, although one has to admit, it is creative, and for some it could pull them out of foreclosure. Even if one did this, it would seem laws prohibit making a profit, so that does somewhat negate the whole idea of selling. As has been said, “Desperate times call for desperate measures.”
See the original article at Raffles: Real Estate’s Latest Game of Chance
Last Updated on September 25, 2008 by Chuck Marunde
Saw your comment on one of my ezine articles and thought that I would stop by and drop a line. I love the blog it is very well put together with great content. I’ll be back soon!
Have a great day!
Good Day Chuck,
I just came across your post and I thought that I could shed some light in a different direction. I helped start a company that is focused on assisting non profits and home owners to create successful home raffles. http://www.USAHomeRaffle.com. You mention that there isn’t any profit in there for the home owner, well actually there is… and in this economy there is more profit in doing this then selling it normally. Right now, most people can not even get the appraised value for their home, they are left to sell it below it appraised value. You simply take what the buy offers. With a home raffle you are guaranteed to get the appraised value and that alone for some home owners (in todays market) is a huge benefit. (Of course the raffle needs to be a success and that is where we come in. ) When you look at our win win scenario, I think you will find a few more benefits to it as well.
http://usahomeraffle.com/EverybodyWins.asp
Thanks for keeping an open mind
Have A Great Day
Ser Greene
I appreciate your post! I usually don\’t even bother to leave comments, but i like what you had to say here! Would you mind terribly if I left a link back from my site? My visitors would appreciate this!
I appreciate innovative ideas like a house-raffle, but on the other hand I must say: This really shows how crazy the real estate world became after the crisis! What`s next? a house-selling-reality show? 😛
You know what. I think I am going to do this!! I have 5.22 acres if the most beautiful land in the Black Hills of South Dakota. It has a little cabin on it and the prime building spot for a million dollar plus log home. My husband and I built this cabin just before he ran off with the cake decorator he met in a chat room. The place was mortgage free, my divorce lawyer had me find a bank that would give me a loan based on the equity so I could pay him off and never see the rat again. He moved with her to Texas and I stayed with all the bills and risk. The plan was to sell the place to pay off everything and be OK. Yup you guessed it, that was a couple days before the market went bad. I had a years mortgage payments built in to the loan but now the time is up and if I don’t do something, it goes back to the bank so what have I got to loose? at 25.00 a ticket all I need to sell is 8000 tickets, anything over that I will donate to the the local Community Disabilities support agency for the disabled. Wish me luck.
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