$432k House Raffle in Forsyth for $5 a Ticket | Creative Way to Sell a House
By kwarmath on January 9th, 2009
Forsyth - Of all the posts I’ve written, this post last October about a house auction in Annapolis has made my phone ring more than any. It never ceases to amaze me when I see that Maryland area code come across my caller id … I know what the call is for sure.
To date they have sold 22,517 fifty-dollar tickets for that auction, with only 27,000 total needed to pull it off. They are confident that they are going to sell the required amount and have scheduled the auction for January 23rd.
In my initial post, I had hypothesized about doing an auction here in Alpharetta – but it was only a hyphothetical because I got a bunch of inquires about how to buy a ticket for the “Milton House.” My thought was to do an auction for $100 a ticket and sell 7,000 of them. I thought selling 27,000 tickets was a bit of a stretch, but it looks like I was wrong.
Fast forward three months and now there is an auction for a $432,000 house in Forsyth County north of Cumming at 7996 Bethel Road. The house acutally has a Gainesville address, as it is between Cumming and Gainesville.
Here’s the deal, though: FIVE DOLLAR TICKETS. Can I call this the $5 house then? You can buy individual tickets or group of 5, 15 or 30.
Here is the link to the website to get more information and purchase tickets: RafflingMyHouse.com. The raffle is scheduled for March 31, 2009. The house is pictured above and is 4 BR and 4.5 Baths.
There seems to always be a charity aspect to the house raffle. In this case, it is a local organization call Seed Sowers, whose mission has remained for the past 10 years, to assist single parents, the handicap, and the elderly with various needs including housing.
In a time of economic turmoil, the house raffle is a logical solution. On one hand, Seed Sowers has an opportunity to increase its revenues to support the growing demand of its mission and the homeowner has an opportunity to indirectly sell their house by donating it to the charity. The donation includes the equity in the home and 10% of all proceeds from tickets sales in excess of the homes fair market value.
Just another example of more creative thinking in a market that demands it. Tickets went on sale January 1st. Let’s see how many they sell.
With a min. requirement of 79,000 tickets in less than 90 days, that might be a tough target to hit – but I hope they make it.
looks like they win either way…
“If for any reason the raffle is canceled, Seed Sowers, Inc. must reimburse each Raffle ticket purchaser within sixty (60) days of the Raffle cancellation date but may retain up to 10% of the ticket price for administrative costs.”
Kevin, thanks for the plug….www.RafflingMyHouse.com We are excited about this opportunity as it not only raises money for a great charity, but if it is successful may prove as an alternative method for banks, contractors, and homeowners to sell their real estate. If anyone has a question please email us through the Questions or Concerns link on the home page. Thanks Again! Jc
Kevin,
Just think you might want to clarify something here, I think the reason there’s a charity tie-in is because the only people who can conduct raffles and lotteries are charities (IRS-recognized not-for-profit entities, not just “charity for my kid’s college fund”). A regular homeowner or builder or bank could NOT have a raffle to sell their property.
Good point about the not for profit status being a prerequisite. Many people have gotten into hot water setting up raffles whenever monies are needed for profitable groups.
Hmm…even I might be tempted for that one…especially since its warm there and freezing here!
A question I have though is what taxes do you have to pay if you win? And what tax deduction does the seller get?
All of these are good questions and comments…much appreciated and the point about a charity needing to be involved so that you can have a raffle is a point well taken.
I’m not sure about the tax implications of winning. I’ve been asked that before and am in the process of getting to the bottom of it.
We’ve had a number of people interested in raffling their homes after they have read this and we are working on an offering along those lines…details, details, details ;-> …stay tuned.
thx, k.
Good Day Everyone.
I too was excited about home raffles when I first realized their potential this past summer. Because of my excitement and all the questions I had, we created a web sited called USAHomeRaffle.com. Here we try to answer as many questions as possible while allowing homeowners and non profits to connect. We also help non-profits to market their raffle in many ways once it is in progress. We build the site, announce it to our email list and redirect traffic to their websites for the most exposure.
So back to your questions, I am not an accountant so you cannot bind me to this but what a few accountants have told us is: Your winnings are taxed in the same way as if you won lotto for your state. There is a separate tax bracket that you are put into for these winnings and the fed government will take its share as well as the local and state governments. Because the house is not cash, the winner will normally have to take out a mortgage to cover the taxes based on the value of the home. (Unless you happen to have that kind of cash lying around??) So lets say that the taxes are 50% (keep it high to be on the safe side) then you need to get a mortgage for 50% of the value of the home you just won.
A loan for 50% to value is a lot easier then getting one for 80 or 90% to value, which is normally needed to buy a home. Most mortgage companies would happily get that loan done. Now I am pretty sure it is NOT as high as 50%, but I use that number just to keep it over inflated and easy to calculate. Talk to an accounting IN YOUR STATE for specifics.
I hope I have helped.
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Ser Greene
Ser, thanks for chiming in on this house raffle topic. There is certainly a lot of interest in this as people look for creative alternatives for getting their homes sold. We’ve had a number of sellers contact us, just based on this blog post, so we will definitely be figuring out how to do this in Georgia, and I’ll be checking out your website for ideas.
I am interested in raffling my house, which is located in McDonough, GA. Unfortunately, we bought this house in October 7 (new) right before prices plummeted. Now, we are upside down on the mortgage by about $40-60,000. It’s a beautiful home with an inground pool and in one of the best school districts in Georgia (Union Grove). Are you connected to any non-profit groups in Georgia that would be interested?
I’m also interested in raffling my house located in Warwick, Ga. I’m not looking to make a profit, just to pay the current mortgage off. I do not think I’m upside down. Please see link to view the house. Any help at all would be helpful.
Thank you!
I have been trying to explain to every politician the merits of combining a Raffle thru the state’s Lottery system and only Realtors using a raffle type listing to list the home. All involved get paid when the raffle is drawn. Nobody will listen. Now maybe you can listen up. I have all the details. This will get homes gone with no losses & set a new standard for real estate sales. No one addresses it cause they cant claim it or cant make money off the idea. Get with it politicans and the public who elected you demands it.
As home raffles continue to increase in popularity as the housing markets decline, it is good to see that there is now a book about raffling homes. The book is titled, “The Home Raffle Book” and is located at http://www.thehomerafflebook.com. It’s a must read for anyone conducting or participating in a home raffle and includes a sample business plan.
This Raffle idea is a win win for everyone, but must be done under strict supervision and rules to keep things on the “up and up.” It will slow foreclosures, keep hard working responsible people our of bankruptcy, banks would become more solid with loans being paid off. MOVE REAL ESTATE – Give people NEW HOPE for survival in a continual crumbling economy!
Bob, I want to raffle my house in Eatonton near Lake Oconee. Can you please give Mr. Closs my email so that I can ask him some questions? I am not upside down on my mortgage yet but no one is looking for a house right now in this area. I know of several agencies i could offer to help. I have read the laws on raffles but still need some clarification on how to do it. Did Mr. Closs sell/raffle off his home? Thank you for any help Beth