During the recession of 2008, many homeowners found themselves struggling to sell their homes. Selling houses by raffle was a popular alternative to this problem.
The biggest news story at the time was a Devon property worth £1m. Its owner put up the house for sale in a raffle with tickets at only £25 each. The 11-acre estate was sold with 46,000 tickets, making the seller more money than the actual value of their house.
The Gambling Commission did investigate the raffle, but the sale was ultimately completed.
This trend of selling houses by raffle didn’t fade away after the 2008 recession. In 2017, headlines read “Couple sell house by raffle” when an individual won a £800,000 property in Lancashire with a £2 ticket.
Another £2 ticket meant a £545,000 house. People who had difficulty selling their homes or wanted to enter the property market without the hassle found this to be a dream come true.
Is selling a house by raffle the right move for your home? Is it even legal? Could you make enough money on a raffle to pay off your home loan? Where can you learn how to sell your house by raffle? This guide will help answer all of your questions.
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Understanding a House for Sale by Raffle Ticket
Selling a house by raffle is a concept you may not be familiar with. It works just like any other raffle – people have a certain period to buy tickets for a chance to win the home.
The costs of the tickets vary depending on the house, with some as low as a few pounds and others as high as £20. On the designated date, the winner is selected, potentially with just one ticket. This means it’s possible to win a house for the cost of a lunch.
These types of contests have been around for a long time, and are becoming even more popular with the help of social media. If you don’t think you’ll ever be able to afford a property, a house raffle might be the perfect solution for you.
However, it’s important to note that the house will only be awarded if the set number of tickets are sold; if this doesn’t happen, the winner will receive a cash prize instead.
Can I Sell My House By Raffle?
Houses can be sold by raffle without breaking the law. However, the laws and regulations governing gambling must be followed.
The UK Gambling Commission (UKGC) will shut down any raffle that it deems to be an illegal lottery. Generally, if tickets are sold to win a prize, this constitutes a lottery, so a license must be obtained from the UKGC before a house sale by raffle can be held.
Prize-based competitions are not regulated by the UKGC, so house rafflers are legally able to operate according to this legislation. Lotteries and prizes are classified differently because lotteries require participants to demonstrate some level of skill to qualify for entry.
This could mean choosing numbers or answering a question. Prize competitions, however, simply require the purchase of a ticket.
The UKGC is not the only authority that can intervene in a house sale by raffle. The Advertising Standards Agency (ASA) may also step in if the marketing surrounding the raffle is misleading. Omitting information or presenting false information can result in the ASA revoking the ability to operate the raffle.
Additionally, if any government entity finds that money laundering or redress rules are being broken, the case will be referred to the National Trading Standards Estate and Letting Agency Team.
This organisation protects consumers by enforcing the Estate Agents Act of 1979 and the Tenant Fees Act of 2019. Although they mainly regulate estate agencies and letting agencies, they also handle any disputes in the real estate sector, including house raffles.
It is important to understand the rules and regulations governing property raffles. So while the answer to the question “Can I sell my house by raffle” is yes, it is wise to consult a solicitor to ensure that the raffle is legally sound. Failure to do so could lead to legal action, putting you back to where you started in terms of selling houses by raffle in the UK.
The Benefits of a Property Raffle
There are lots of reasons why someone might choose to sell their home in a property raffle. It might be an unconventional option, but it can offer many opportunities.
For example, if you have a pricey property and it is difficult to find a buyer due to a lack of funds, then a raffle could be a great option.
Similarly, if the property has high maintenance costs or is hard to sell on the open market, people who are looking to invest in the property may be more likely to take a chance on a small raffle ticket than the purchase price.
Additionally, property raffles are successful when they feature unique properties with a distinct history.
For instance, a house where a violent act was committed may not be suitable for an average buyer, but there may be a certain kind of buyer willing to pay a small amount for the chance to buy it.
The main reason people may consider selling a house by raffle is because of the current state of the property market.
If there is a slowdown or a recession, a property raffle could be the best way to get the home sold without waiting for a traditional estate agent and watching it sit on the market with no offers.
Sell House By Raffle – How It Actually Works?
Selling your home through a raffle is a process that requires a lot of effort from the homeowner. Unfortunately, no company will do this for you, so you will have to take on the responsibility yourself.
To get started, you must register for the raffle with the lottery duty office, as 12% of the proceeds must be paid to them. You will also need to consult with a solicitor to make sure your raffle is legally compliant.
When it comes to ticket sales, you should decide on a deadline and a minimum amount of sales that must be reached to give away the house. If the minimum isn’t achieved, you can specify in the terms and conditions that the tickets will be refunded or that an alternative prize, such as a cash prize, will be given.
The draw should be held on social media, such as Facebook Live or YouTube. If you have a large social media following, this is the way to go. Alternatively, you could hold a live draw in conjunction with another event to increase ticket sales.
Once the winner is chosen, the ownership of the home must be transferred. Your solicitor will help you with this step, just like with a traditional property sale.
Once it is complete, you will hand over the keys to the new owner and take care of the necessary costs, such as the council tax and any needed maintenance.
Are There Drawbacks to a House for Sale by Raffle?
Selling your home via a property raffle may not be the best option. It could fail to make you a profit if there isn’t enough interest, and you may be liable for any alternative costs associated with the payout.
There are also legal issues to consider, as the UKGC has shut down many of these raffles for violating legislation.
Unexpected expenses, such as taxes on profits and advertising and marketing costs, could also arise. Moreover, it requires a considerable amount of time and effort to manage the paperwork and the day-to-day running of the raffle.
Overall, selling your house through a raffle has several potential drawbacks that you should be aware of before making a decision.
Is a Property Raffle Right For You?
If you’re trying to figure out how to sell your home in a sluggish market, UK homeowners have found that offering a house for sale by raffle is an option, although it requires more effort than other more traditional methods.
Before deciding to go down this route, it’s essential to make sure you understand the legalities of selling your house by raffle.
In the event of a potential burglary, it is a wise idea to photograph each room in your house and take note of all important items.
This will be useful for the insurance company in the case of a robbery and may help the police in finding any stolen items. There is a clever second purpose to this.
During a robbery, the thief is likely to ‘turn the place upside down’. This is not simply because they want to take your possessions and flee.
You may not be able to tell what is missing as you are in shock, but rather, you know that something is gone. Having pictures of the rooms in their original state will also help you to figure out what has been taken.
Any thoughts about selling your home?
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