Put the words' raffle' and 'house' in the same sentence, and most people think of a competition where the top prize is a luxury property. These draws are becoming increasingly popular, usually organized in partnership with big-name charities as a fundraiser.
Raffling a home can be a draw for some homeowners. Frustrated homeowners can use raffles to get rid of a property that sticks and won't sell. Unsurprisingly, these raffles can generate much interest amongst buyers keen to land themselves a bargain.
Should You Raffle off Your Home?
The logic behind a raffle is offloading the house and possibly elevating the price. It's a consideration for a home with little sales interest or has just received low offers. However, raffling off your house in the US has one huge drawback – you won't see any of the money.
An alternative is to consider selling for cash if you have no interest in your property or need to move quickly. Don't view a cash sale with suspicion by default. Instead, research the market; there are companies which will make you a quick offer, so take your time. Many people have sold for cash with Kind House Buyers. With this service, among others, you get a quick response, and you don't even have to make repairs or clean up.
Still set on raffling off your house? Let's discuss how it works and the legalities.
It used to be the case that raffling a home was illegal in most states because it is considered gambling.
If it is legal in your state, the usual protocol is that a home raffle must benefit a non-profit organization. The nominated organization will receive a portion of the proceeds, but you, the seller, cannot benefit from getting rid of the property.
As a US citizen, you might be frustrated at the restrictions on raffling off your home. It is not illegal in other countries, but it is a route littered with pitfalls and, somewhat ironically, a real gamble which doesn't always go the way the owner wants.
How Does It Work?
The non-profit has to own the property before the house raffle starts. When the house sells, the non-profit gets all the proceeds minus any tax. You get rid of your home, but you cannot receive any proceeds.
This stipulation is the law in most states across the US, and this is because most states recognize raffles as a form of gambling.
That said, some organizations will help coordinate a house raffle as long as the proceeds go to a charity. The money from the raffle tickets goes to the nominated charity, and one lucky person wins a house. It is not illegal, and it is entirely different from a desperate vendor trying to offload their home.
Raffling off a house can benefit those stuck with a property draining them of money, whether they inherited the home or for other reasons. But if you want any returns from the sale, it's better to sell the house for cash. Otherwise, if you're hoping to donate to a charity, it's an option that helps you do a little good in the world.