House Raffle: $10 For A $3 Million Home

While listing your house with a real estate agent is the traditional way to sell, in some hard-hit housing markets, it’s not working as houses languish on the market for months…even years. Which has some homeowners trying something much less traditional: a housing raffle.

“We did a lot of work to the house. Added a movie theater. We put it on the market, tried to sell it… it’s just not working out.”
-Miles Brannan, Home Raffler

For months the Bransons tried to sell their 3 million dollar, 6000 square foot home the traditional way: by listing it with a broker. But it just wasn’t happening.

In hard hit housing markets like those in California and Florida, it’s a common problem. But this Fort Lauderdale family is trying an uncommon solution.

“We’re doing a drawing for the house. We’re selling tickets for $10 a piece… we’ve set a cap on how many we’re going to sell.”
-Miles Brannan, Home Raffler

So far about 80,000 $10 raffle tickets have been sold. Once that number reaches three hundred thousand… 3 million dollars worth… the house is transferred to the lucky winner. A portion of the proceeds also goes to a local charity.

Sound like a great way to buy or sell a house? Maybe. But keep in mind if you’re the lucky winner, you’ll owe income taxes on your 3 million dollar house: at least a million in cash. And if you’re thinking this is a simple way to sell your house?

“It’s a lot of work. A lot of work. And a lot of stress. And if we don’t sell all the tickets…and arrive at the point where we do a cash drawing instead of selling the house… which I don’t want to happen. We still end up with the house and we didn’t get anywhere.”
-Miles Brannan, Home Raffler

Why is selling your home through a raffle “a lot of work?” One reason is that in order to sell enough tickets to make it feasible, you have to get the word out. And setting up a website is only the tip of the iceberg. Once you’ve got a website, you need to get people to see it. And that means publicity, publicity and more publicity. Without it, you’ll never attract enough people to sell the volume of tickets necessary. Consider the Brannan’s. When it comes to publicity, they’ve worked hard and been very successful. In addition to stories in local newspapers and TV news, they’ve also been mentioned on several national outlets, including CNBC, the Wall Street Journal, Fox news and, of course, Money Talks. You can’t expect to do much better than that. And yet, even after this level of awareness, when we spoke to them a couple of weeks ago, they were still far short of the sales they need for a successful raffle.

Then there’s the legal angle. In general, a raffle is considered gambling and thus illegal in most states, at least by individuals. So setting up a legal raffle may not even be possible where you live and if it is, it means paying an attorney early and often. It will also most likely require working through a legitimate non-profit organization: one that will actually benefit substantially should the house actually sell. So you’ll almost certainly be parting with a substantial amount of the sale proceeds.

Bottom line? Selling your house with something like a raffle may sound fun, but it’s way more difficult than it looks. Over the last 15 years, we’ve covered variations of this story three different times with three different owners in three different parts of the country and thus far have yet to see a successful sale this way. Hopefully the Brannan’s will be the first… we’ll see in a few months. But win, lose or draw, the Brennan’s story is still testament to the fact that when the going gets tough, the tough get creative.

To check out this home raffle yourself, head to www.floridaluxuryauctions.com.

Stacy’s Note (January, 2010): This house, despite all the publicity mentioned above, ultimately wasn’t raffled off. They needed to sell 300,000 tickets and by December 31st, 2009 had sold only 70,000. (You’ll note that in the story above, which was written in July of 2009, we were told 80,000 had already been sold. Maybe we got it wrong.)

The $700,000 that was raised was divided between one lucky winner and the charity they were supporting. And other than good karma, the homeowners have little to show for a very long, stressful and expensive experience.