More homes, particularly luxury houses and condos, are being offered as the key prizes in raffle drawing projects throughout the country. The dream of acquiring such a property free and clear for the price of a raffle ticket (typically $10 to $100) is a very strong motivator.
The reason for the growing trend is that high-priced homes in many markets still are experiencing slow sales, often being on the market for six months or a year. Owners look for new, unconventional means of selling their properties. They see a raffle as being one possible option.
However, it's not just a matter of deciding to raffle your home and printing a batch of raffle tickets from your computer. Most state laws prohibit such a sale unless the home is owned by -- and raffle tickets are sold by -- a nonprofit organization.
Even with this requirement in mind, many homeowners are turning to the raffling option. They make arrangements with nonprofit groups and transfer titles to the groups, and the raffling process begins. Like the homeowners, nonprofits are highly motivated to implement any project that promises to generate needed funds in these tight economic times.
"Home and condo raffle contests are popping up all over, many from nonprofit organizations scrambling to stay afloat when there are so few donors," says Tim Suereth, founder of Veterans Retreat, a nonprofit charity for wounded veterans. "Home raffle drawings are more complex to set up and administer than other more traditional types of small-stakes raffle drawing contests, but they can produce sustainable revenues for a charity. Each contest could potentially fund programs and services for an entire year or longer."
Suereth is producing a raffle project as a fundraiser for his group. The winner will receive a Miami Beach waterfront condominium or $200,000 in cash. He also has written a book on home raffling.
"These contests can breathe new life into previously illiquid and distressed properties and produce a windfall for the lucky raffle winner," Suereth says.
However, others point to the downside of raffling a home. One message posted on Trulia, a real estate industry Web site, says, "Do everything you can to avoid getting caught in a house raffle scam, and really, just forget the whole raffle idea and consider a house auction instead."
Jim Woodard writes a weekly column, "Open House," for creators.com.