Annapolis and Milton - You can buy a million-dollar house for $50 in Annapolis. Now here is the catch: It’s a raffle. You buy a $50 raffle ticket and are entered into a drawing for the house (shown to the right with the porch). Ten percent of the proceeds also go to support a local charity.
When I see things like this I think: "Why didn’t I think of that?" What a creative way to sell a high-end property in a challenging market. While I might not always have the original idea, I’m not above replicating something that works. The people in Annapolis didn’t come up with the idea either. They got the idea from someone in western Maryland.
I’m marketing a couple of properties that would be good candidates for this – what am I thinking? All my listings would be good candidates for this if it gets them sold.
I have a couple of $700,000 properties in Milton that are rally fantastic: finished basements, one-acre lots, best schools and swim/tennis neighborhoods.
They are selling tickets in Annapolis for $50. I figure that is too cheap. Let’s say $100 gets you a crack at a $700,000 house in Milton / Alpharetta. That is only 7,000 tickets we need to sell. They are trying to sell 31,000 tickets in Maryland. I like our odds of winning better.
We could run the raffle totally above board just like the Georgia Lottery, American Idol or the Olympics…ok, maybe like the Georgia Lottery at least.
The trick is marketing and public relations of the event. That is where the folks in Annapolis have done a great job of using viral marketing and blogs like this.
What do you think? Would you pay $100 bucks for a chance to win the red brick, 5,500 sq. ft., 5 bedroom house in Milton shown above at 1:7000 odds? Would you rather spend $50 for 1:31,000 odds for the house in Annapolis? Or would you like what is in the box that Johnny is bringing down the isle now?
I would definitely take a shot at the raffle, but had a few thoughts:
1. Once a winner is selected, how does closing work?
2. Was the house sold for $100 or did it sell for $100 x (Num of Tickets Sold)?
3. Would it affect local comps of other homes?
4. Would I need a mortgage or is it mine free and clear for the $100 entry?
Thanks for your amazing real estate blog
Hi Eric:
1. Closing is simple i think. Seller just give buyer a Quit Claim Deed or Warranty Deed. In the rules for the raffle, Seller would be obligated to transfer clear and marketable title. Closing attorney would verify with title search. Someone would have to pay the attorney’s closing costs, but they wouldn’t be much.
2. I guess the house sold for $100 x the number of tickets sold. The seller could hold out having the auction until x number of tickets are sold I suppose.
3. Who cares? Comps smopms. I think you could argue the house sold for $700k. Foreclosures are hurting comps much more.
4. No mortgage…you get the house for your $100 entry…you won the raffle!
Thanks for reading my blog, although i don’t know if its amazing ;->
I’d totally go for the $100 for 1:7000 odds. Although I rather like the house I have. Maybe we’d winter there… =)
What about the tax consequences for the winner? If someone wins the home, won’t they have to pay a huge sum in taxes?
Jill: thanks for reminding me, I meant to mention the tax implications of winning. I’m not a CPA, but I think this would have to be treated like the lottery. Winning would essentially be considered income and would be taxed i believe. I’d be interested in the opinion of a tax expert on how best to handle this.
Maybe you could win the house and get a mortgage for the taxes! ;->
k.
how do I buy a ticket? when is the drawing?, will all entries be notified of the winner? by e-mail? what would be the cost of taxes, winning? how much in property taxes? thanks.
I have heard about this before and I think it’s a great idea! I think it would work well on an unique high end home as opposed to a regular tract home. I might use this on one of my higher end homes in Las Vegas.
If you try it, let me know how it goes for you!
I work for ABC NEWS and am interested in the story about the house lottery. Where and how do you buy tickets. This might make a good yearend story.
Thank you.
Gary
It is incredible how many inquiries I’ve received from this post, both emails and phone calls as well as comments posted here.
To answer everyone’s question: goto http://www.fiftydollarhouse.com to buy a ticket. Good luck.
k.
We are the company that designed and produced the website for the San Mar Children’s home raffle which was successful. they sold over 5,000 tickets @$100.
the secret is the marketing. they were able to get Washington and Baltimore news outlets and even CNN brifly to run the raffle as a news story because of the uniqueness and the Cildren’s Home.
http://www.sanmarraffle.com
The site is complex because you want the ticket buyer to think they actually ran the transaction but they didn’t actually run the credit cards until they knew they had enough sold. Everything is still Secure Socket Layer Encrypted and all that. This avoids having two sets of transaction fees if you don’t sell enough tickets thus mitigating the downside. We charge $2,500 to do our part which cannot be mitigated since it costs us the same whether or not the tickets are sold.
You can contact us at http://www.dhweb.com
Just a thought. I own my own business and I have had people stop payment on credit card payments before. Could the people who actually purchased a ticket stop payment within 45 days from the purchase thus leaving the seller holding the bag for the balance of those tickets? Maybe that is why they planned the closing 90 days from the drawing??? Well, either way it is a win, win, win situation in my book. Good for the seller, buyer and charity. It also includes the element of fun! I am game on any oppurtunity like this! When can we eneter for more houses? I have enetered for the house for $50.00. By the Way something like this will cut out real estate sales commision. Sorry.
dear sir
pls. send us terms & condition
thanks