When the property market slows down and selling a house becomes more of a challenge, homeowners may be drawn to out-of-the-box ideas, such as property raffles. But are these events a scam or legit? Is it a good way to sell a home that otherwise is failing to attract buyers? Is it realistic to expect a huge profit, or are you at risk of giving your home away for a song? Read on to find out about selling your house by raffle.
How Do Property Raffles Work?
A homeowner advertises their property as the prize in a raffle. Tickets are generally sold for between £2 and £25, and most people aim to sell around 100,000 to cover their costs and make a profit. In most cases, the owner will stipulate that they are entitled to award a cash prize or multiple cash prizes instead of gifting the property if a minimum amount is not raised via ticket sales.
How Common Are House Raffles?
According to Loquaz, the home of UK house competitions, over 96 property raffles were listed in 2021 compared to just eight in 2019 (and 93 in 2020).
For buyers, raffles offer the tantalising prospect of owning a house outright for as little as a few pounds. In a market where property prices are rising faster than the average salary, this is an opportunity that proves hard to resist for many. For sellers, raffles can feel like a fun way to sell their homes and bypass the often tedious, lengthy and stressful UK house selling process.
The Benefits of Selling Your House via a Raffle
- Sell a Hard-to-Sell Property
If your home has been on the market for some time, perhaps it is a non-standard construction, in poor condition or has an issue such as the presence of Japanese Knotweed, a raffle provides an alternative way to sell.
- The Potential for Huge Profit
Property raffles are still something of a novelty. As such, they can attract a huge amount of media attention, especially if the house up for grabs is particularly valuable or unusual. There is the potential to sell more tickets than is required to hit the sales target, resulting in a healthy profit.
- Less Hassle, More Fun
Some homeowners who have been through what you are contemplating, selling your house by raffle, describe the process as being a lot more straightforward than a traditional on-market sale and much more fun!
- A Low-Risk Way to Sell
Most people who raffle their home will include a clause in the competition small print that allows them to offer cash prizes instead of giving away the property if the minimum number of tickers are not sold by the closing date. For some people, this makes a raffle a relatively low-risk way of selling a house and one that could potentially reap big rewards.
The Disadvantages of House Raffles for Sellers
- Time and Effort – Selling Your House by Raffle
While some people love the process of raffling their home, just as many will find the whole process stressful and time-consuming. There is a lot of effort involved in marketing a raffle and achieving the target number of ticket sales. And there are no guarantees that the raffle will be successful, which could mean that all your efforts have been in vain.
- Selling Enough Tickets Is Not Easy – Selling Your House by Raffle
Although winning a house may seem like a dream come true to the seller — why wouldn’t people pay a few pounds for the chance of a mortgage-free life? — property raffles are not always an easy sell.
If the house is large and expensive potential entrants may be put off by the prospect of running and maintaining it. Others may be concerned that the seller has not managed to find a buyer via traditional means (what’s wrong with it? And, if I won it, could I ever sell it?). If there are strings attached to winning the raffle, for example, there is a high stamp duty land tax to pay, or the property is subject to certain permissions or licences, it may be harder to sell the required number of tickets.
- Complex Legalities – Selling Your House by Raffle
Property raffles are legal if the organiser adheres to the complex regulations surrounding them. For a layperson, the law in this area can be daunting, and it’s very easy to inadvertently contravene the rules.
In 2007, The Gambling Commission stated that many property raffles in the UK are not legally compliant, and if discovered, they would be shut down. The most common infringement is running an unauthorised “lottery” rather than a raffle, which can result in a fine of up to £5,000 or a prison sentence. The only way to be sure that you don’t fall foul of the law is to hire a qualified solicitor with expertise in this area, which can be extremely expensive. Selling your house by raffle may expose you to legal issues.
- High Marketing Costs – Selling Your House by Raffle
The success of selling your house by raffle relies on knowing about the property and feeling motivated to buy a ticket, or ideally, multiple tickets. This often requires a significant marketing and advertising budget.
So, is selling your house by raffle a good idea? Possibly. If you write the small print of the competition with care, budget for advertising and legal costs and are willing to commit the effort necessary to achieve your ticket sale goals, a raffle could help you shift a hard-to-sell property for a tidy profit.
However, complex legalities, expensive marketing costs, the challenges of selling enough tickets and the sheer time and energy required to make selling your house by raffle is often enough to send owners of problem properties or people trying to sell in a slow market, in search of alternative routes to a quick house sale.
*Collaborative post
About Debz Louise
Debz Louise is a UK-based lifestyle expert and the founder of several lifestyle blogs, including Wannabe Princess and Under 5s. Specializing in everything from interior design and home renovation to body-positive fashion and early years development,