Property Raffle: Will It Help Me Sell House Fast?
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 increasingly 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?
What is 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.
How does a house raffle work?
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.
Can anyone run a house raffle?
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.
When raffling your house, you would also need to apply for a license from the Gambling Commission and follow their strict rules and regulations, meaning it’s not as easy as just selling tickets.
Pros and cons of a property raffle
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
Are house raffles legit?
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.
Illegal house raffle penalties
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.
In some cases, if you have set up your own housing raffle and not followed the guidelines, then your local council could intervene and force you to cancel. They may be able to offer you some basic advice on how you can sell your property through a house raffle, but they won’t be able to offer the quality of advice you will get from a legal expert.
Is winning a house raffle realistic?
Whilst housing raffles have found increased popularity through the chance to win some large and expensive properties, it remains to be seen whether it’s a worthwhile venture for someone looking to sell the ‘average home’.
The chances of being able to win one of these raffles are very slim, compared to if you were battling it out with other buyers on the open market.
For example, if someone was wanting to get £120,000 for their property and so tickets were being sold at £1, and you bought 1 ticket, you would only have a 0.0008% chance of being the winning ticket.
In some cases, not enough tickets are bought before the deadline to raise the required amount of money for a property, meaning that even if you do have the winning ticket, you may end up receiving the sum of money raised through ticket sales, rather than the property.
One instance in 2018 brought attention to the unrealistic nature of house raffles and how unlikely it can be for a buyer to win the house on offer.
In this instance, there was a £2.7 million castle in Scotland on offer, but once the raffle had closed and expenses had been paid, there had only been £77,000 raised – a big way off what the seller was wanting.
As a result of this, the winning ticket holder just received the money instead. This has meant that potential buyers are now more reluctant to entering property raffles, as they know their chances of winning are slim, meaning the chances for a seller to be able to sell their property for a price they want through a house raffle is slim to none.
Should I sell my home in a property raffle?
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!