I’ve not done it, but I’ve heard about it, that there are all kinds of legal ramifications, and they vary by state. In some states, it may not even be legal, it’s considered gambling. If you have a property you are considering this for, I would definitely do some research. I think also, that if you do run a lottery, you almost always have to sell the house, even if you can’t find enough ticket buyers. This may not necessarily be so if you auction if off, again, laws vary greatly, but I would personally lean towards auctioning as described in the “sell your house in 5 days” book, rather than lotto it.
I saw an article on a couple who raffled off their home. The house was owned free and clear and was worth $150,000. They sold 500 tickets for $300 each to individuals and companies within 60 days and did a drawing for the winning ticket. The winner took possession of the home and the couple got their full asking price.
Questions:
Is raffling a home legal?
With lottery fever around the country the odds of winning this sort of raffle is 500 to 1 instead of the 1 in 70,000,000 for a lottery. Why wouldn’t everyone try to sell their home this way?
Has anyone on here ever tried doing this? What were your results?
…you make it a contest, not a gamble. Require an essay of 100 words or less, on why you want to win this house, for example. The entry fee is $300, and if the total number of entries falls short of 500, you reserve the right to refund all monies received and cancel the contest.
I seriously doubt that you could sell property this way for any sustainable period. After the first or second time, the novelty is gone, and I bet your target audience would move on.
Posted by David Krulac on May 14, 2000 at 20:18:47:
in some states you can only have a raffle if you are a charity/non profit. otherwise its illegal gambling. if legal you may no be able to cancel the raffle if not enough tickets sold. I’ve also heard of some people getting around the illegal gambling but having a essay or poetry writing contest where the entry fee was say $300 and the first prize was the house, apparently that’s not gambling.
I too liked the “sell your hosue in 5 days book” by Wm.
Effros, and I wrote a positive review on Amazon.com
David Krulac
The others are right. You need to be very careful to verify that this is legal.
Just thinking logically about the whole thing, I think you would have to spend a ton of money in advertising to pull something like this off. There is a big difference between wasting $1 or $5 on lotto tickets as opposed to $300 on a ticket.
A question for you, would you be interested in gambling $300 for 1 in 500 odds of winning? Another problem what if you only sell 100 tickets or worse only 20 tickets? You would need some type of minimum. And of course there goes the whole advertising budget again.
The State of NJ has a Games of Small Chance Commission that oversees and controls all forms of gambling within the State, and such a raffle for would violate their laws, I’m sure. Further, such games are usually restricted to Non-Profit organizations.
I don’t know about of the real estate laws concerning this, but from a gambling standpoint, you’d want to think twice.