It may be a very out-of-the-box approach, but some home sellers have decided to take a unique approach to getting their homes sold. With a housing market that is in turmoil, some sellers have decided to sell raffle tickets to get rid of their homes. This practice is not legal in all states, and I am not a lawyer, so you need to check out the laws in your area before considering this idea. Many states will only allow a home raffle if it is carried out by a non-profit organization.
Last year, a couple from Maryland decided to raffle off their home by selling 6,289 tickets for $100 each. The home was appraised at $390,000, and they were able to make a sizeable donation to charity with the overage.
Don’t expect to make a huge profit for yourself. You can usually only gain what the home appraises for, and you still need to pay your mortgages and leins. So, if your home appraises for $300,000, but you owe $200,000 on your mortgage and $50,000 on a second mortgage or line of credit, you would only walk away with the $50,000 that would be left over. The donation to charity would be anything over that.
Appraised value $300,000- $250,000 in mortgages= $50,000 to the homeowner
Tickets sold $500,000-$300,000= $200,000 to charity.
I found a few homes for raffle in Indiana:
- the Southlake YMCA and St. Jude home in Crown Point
- the Built2Win Dream House in New Palestine (both listed on USAHomeRaffle.com)
- the Easter Seal Home in Evansville
In Laguna Beach, California, they are raffling off a million dollar dream home to benefit the Ocean Institute, with many other prizes available as well.
Hmmmm, thenew Hendricks Regional Health/YMCA in Avon is looking for donations, I wonder if someone would be willing to build and then raffle a house for them??
This bankrate.com article highlights some of the cons to doing this: http://www.bankrate.com/brm/news/realestateadviser/20080608-home-raffle-a1.asp