We explore what a property raffle is, how they work and whether or not they will help you sell your property...
Most people think to sell your house successfully you need the help of an estate agent, through the open market.
It’s not often thought about how selling this way can lead to your property sitting on the market for MONTHS with little to no interest, leaving you wondering how you’re ever going to shift your house and move onto the property of your dreams.
This is where entering your house into a property raffle could be your answer.
Selling your house through a property raffle has become more popular as of recent years, with many thinking it’s a ‘fun’ way of selling your property and one lucky person wins a whole house, for the small price of a raffle ticket.
But are property raffles what they seem to be? Are they a fun way to sell your house? Or are they something you need to approach with a bit of caution?
We’re going to reveal the answers to all these questions and MORE!
Ready to get started on how a property raffle might be your secret weapon to a fast sale? Use the menu below to help you find what you’re looking for ASAP:
- What is property raffle?
- How does a house raffle work?
- Pros and cons of a property raffle
- Are house raffles legit?
- Should I sell my house in a property raffle?
Don't want to risk selling through a property raffle?
A property raffle is a less conventional way of selling your house. When selling your house through a property raffle, prospective buyers are able to purchase a ticket to be in with the chance of winning your house.
You will set a deadline of either how long people have to buy tickets or the minimum number of tickets you want to be sold. Once one of these deadlines are reached, a ticket will be drawn, and whichever buyer has the ticket will win the keys to your property.
A property raffle is an unusual way to sell a property and can be a good idea for those who are struggling to shift their property through more conventional methods, such as through the open market.
Selling your house through a property raffle can be quite successful, especially as your house should receive a lot of publicity and buyers will be enticed into buying a raffle ticket, purely for the novelty of being able to win a property for a small fee.
Buying a ticket for a property raffle can cost you anywhere from £2 to a few hundred pounds. As a result of the ticket prices being so low, selling through a property raffle can leave you selling your house for significantly below the market value.
If you’re wanting to sell your house through a property raffle you have two options – either set a raffle up yourself or sell through a ‘property raffle company’. With property raffles recently becoming more popular, there are a few available for you to choose from, such as Raffle House or Raffall.
It’s worth keeping in mind, though, that selling through a property raffle company will lead to them taking a healthy commission fee, with some taking up to 20% of the total raffle ticket sales.
Raffle tickets are sold until either the deadline date is reached or until a minimum number of tickets are sold. If the minimum number of tickets aren’t sold, normally buyers will be refunded the price of their ticket, or the winner will get a cash prize instead. This means a property raffle can’t offer you a guaranteed house sale.
Setting up your own property raffle isn’t as straightforward as it seems, and you will likely need to enlist the help of a solicitor to ensure you’re correctly registered. You will need to sign up for ‘lottery duty’, which will deduct 12% from your raffle ticket sales, and you will need to create specific terms and conditions.
Before deciding you want to sell through a property raffle, it’s a good idea to take a look at the upsides and downsides which come along with it. Lucky for you, we have all the pros and cons listed here for you:
- Sell a property which isn't shifting – Selling through a property raffle gives you a less conventional way of selling a property, especially when your property just isn’t shifting on the open market
- Can be less hassle – Compared to selling through the open market, selling through a property raffle can be less hassle as you don’t have to go through all the viewings and paperwork AND you won’t need to pay any estate agent fees
- Can set a minimum number of tickets – The terms and conditions of some property raffles allow you to set a minimum number of tickets which need to sell and, if they don’t sell, you’re able to say you don’t want to sell your property and ticket buyers will be refunded or the winner will get a cash prize instead
- Publicity – Due to the nature of a property raffle being something less traditional, it can attract quite a lot of attention from both local and regional press. Your house getting more attention will naturally lead to more ticket sales, which could allow you to sell more tickets than expected and therefore get a higher price for your property
- Issues overlooked – As the winner of the property raffle is getting a whole house for very few pounds, any issues with the property, such as it is needing repairs, will be overlooked (something that wouldn’t happen if you were selling through the open market)
- Complicated process – Although on the face of it a property raffle looks very straightforward, it’s actually a legal minefield. You will need to hire a solicitor to create terms and conditions for you and ensure you’re following all laws
- May sell for significantly under value – As the tickets for a property raffle are at a low cost of only a few pounds each, it’s very common a house will sell for significantly below the market value. On top of this, you will also have had to pay advertising costs, commission and legal fees, making this method a hard way to make any real money on your house
- Need for advertising – In order to sell enough tickets to make up the price of your house, you will need to attract a lot of attention. This will require you to spend a fair amount of money on advertising, further increasing the cost to you
- Difficult if you have a house repayments – Entering a property raffle with a house repayments is asking for more complications. You will need to set your target number of tickets at a higher amount to at least be able to make up the costs to cover the house repayments, or you may end up not breaking even
- Commission – If you are to sell through a property raffle company, you will have to pay a commission fee, which can be up to 20% of the ticket sales price. Or if you decide to apply for lottery duty, they will also take a commission of 12% of the ticket sales prices
Starting to 'go off' the idea of a property raffle?
Property raffles are legitimate if you enter them in the correct manner, making sure that you ‘check all the boxes’. It’s highly advised that you hire a solicitor when selling your house through a property raffle, to avoid facing fines or being charged (more on this later…)
The Gambling Commission released a warning in 2007 that stated some improperly organised raffles have gone against gambling laws, which they referred to as illegal lotteries.
One of the major issues with selling through a property raffle is the act of potential buyers having to buy a ticket to win from a draw being classed legally as a lottery. This means that those wanting to sell this way, must register for lottery duty and abide by strict regulations.
The Gambling Commission also states that property raffles shouldn’t be for financial gain and so profit made should go to charity, making it hard for you to make a profit on your property.
If any rules set out by The Gambling Commission are not followed, you could face a fine of up to £5,000 and up to 51 weeks in jail. This is why it’s recommended for you to spend the extra money it costs to get a solicitor to make sure everything you’re doing is legally correct.
Although a property raffle sounds like a fun and exciting way to sell your house, it is a bit of a novelty and once this wears off, you’re left with the facts. These facts are that the process is complicated and can potentially get you into a lot of trouble if it isn’t done correctly.
You also face the possibility of not selling enough tickets compared to what you expected, allowing your house to sell for significantly below the market value.
You will also have to pay out a lot on advertising and legal fees, whilst also having to give a commission to the property raffle website you sell through or The Gambling Commission, who will take a fee when you register for lottery duty.
A property raffle also doesn’t guarantee you a sale, as you can state you won’t sell the property if the minimum number of tickets aren’t sold.
If you want to go down a less conventional route to sell your property, which will get you a guaranteed sale, without the risks and fees associated with a property raffle then we may be able to help!
We’re a cash buyer of properties, buying any house in any condition in any location, completing in a FAST timescale of your choice.
Our offer will be a little below the market value, but the offer will be cash in your bank and, as a ‘thank you’ for using us, we will cover all your fees! Yes, that does mean you can sell your house for free!
Instead of going through a complex property raffle, where you run the risk of facing some hefty fines, with us all you need to do is say ‘sell my house’ and we will do the rest!
Give us a call or fill in our online form today to receive a no-obligation CASH offer, which we could have in your bank in as little as 7 days – it really is as easy as that!
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