By Jeff Adolph
Unique Home Selling Techniques
In an effort to reduce debt and the burden of having a mortgage that they no longer can afford, many Americans are turning to raffles to find a new owner for their homes.
As real estate becomes more difficult to sell, and the economy becomes tighter, globally, the number of Americans electing to use raffles to raise enough money to pay off any outstanding mortgage debt and rid themselves of the burden of a home that no longer want, is increasing. In fact, in the state of Maryland, home raffles are said to be a 'regular occurrence'.
Typically, the home raffle will be carried out as followed:
1) A certain number of tickets would be sold by a specific date, for 'x' amount each; and
2) The money raised would then pay-off any debt owed on the raffled home, with ownership of the home then being transfered to the winner of the raffle.
However, there are some important points to raffling a home that you must be aware of before you start selling tickets, these are as follows:
- You must be aware of your state's gambling regulations, as, in some states the holding of a private home raffle is illegal, unless you have a nonprofit organization as a partner, and the owner of the property cannot raise more than the homes appraised value.
- The nonprofit organization would need to enter into a contingency contract for the home that is being raffled. The nonprofit organization would then pay for the home from the proceeds of the raffle, with the value of the home being no more than the home's appraised value. This would occur, only if the raffle sold enough tickets to recoup the cost of the house being raffled, and the nonprofit organization would oversee the drawing of the raffle.
- The nonprofit organization would need to get approval from the state in which the home was within, and must also provide minimum and maximum ticket numbers to be sold, along with a date for the draw.
- If the number of tickets sold is not enough to cover the price of the home, and the raffle is not drawn, then all of the ticket buyers must have their money refunded.
- If all tickets are sold and the homes appraised value is reached the nonprofit organization is then able to retain the money made after the cost of advertising has been repaid.
- A real estate agent or company will be needed to help with the publicity of the home and also address and draw-up any contractual agreements.
- Home winners will be liable for any state taxes that are incurred as a result of the homes sale via raffle.
Sources: Kurutz, Steven (2008) Desparate Home Sellers Try Hand at Raffles; available online at http://www.seattletimes.nwsource.com
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