How To Sell Your House By Raffle In The UK
During the recession of 2008, many homeowners were struggling to sell their homes. There simply had to be another way to get rid of a property. They quickly found it. Selling house by raffle. This win-a-house trend quickly gained in popularity, too. One of the biggest news stories of the day was a Devon property that was worth £1m. The owner said, “I’d like to sell my house by raffle,” then required those who were interested to buy a ticket for just £25. It was an 11-acre estate. The headlines read “Couple Sell House By Raffle,” and did they ever. They sold 46,000 tickets, making more than their home was actually worth through selling a house by raffle. While the Gambling Commission did investigate the raffle, ultimately, the sale of the home went through.
The initial desire of selling house by raffle didn’t die off after the 2008 recession, though. In 2017, the headlines again read “Couple sell house by raffle” when a woman won a £800,000 property in Lancashire after she paid just £2 for a raffle ticket. Headlines were maid again when another £2 raffle ticket meant a £545,000 dream house. Those who are having a hard time selling their homes or those who really want to enter the property market without all of the hassles find these house raffles to be a dream come true. After all, the headlines coming out of the property market these days aren’t so hot. Is selling house by raffle right for your home? Is it even legal? Could you make enough money on a raffle to actually help pay off your home loan? Where do you learn how to sell your house by raffle? This guide will help to answer all of your questions.
Understanding a House for Sale by Raffle Ticket
If you’re not familiar with the concept, selling house by raffle is a way to sell your house through a contest. If you’ve ever entered any kind of raffle, you already know how a house raffle works. Those who are interested in the home have a certain period of time in which they can buy a ticket or multiple tickets for a chance at winning the home. The tickets come at various prices, depending on the home. Often they can be as little as a few pounds each. They could cost as much as £20 each, though. On the date set by those raffling off the home, a winner is drawn. The winner may have bought a single ticket or multiple tickets, which means in theory, you could win a house for the price of lunch out.
Most houses for sale by raffle come with a minimum ticket sales figure. In the event that the home seller doesn’t actually sell enough tickets to win that amount, the winner of the house raffle gets a cash prize instead of the actual house itself.
These kinds of competitions are just as hot now as they were when they were first introduced. They’re getting even more popular thanks to various social media platforms like Facebook and TikTok. If you’re not quite sure you can ever make it to the property market, a house for sale by raffle ticket is a really attractive option.
Can I Sell My House By Raffle? The Legality of House Raffles in the UK
Houses for sale by raffle aren’t an illegal scheme. You will, however, have to adhere to the laws and regulations that surround gambling in the country. The UK’s Gambling Commission – UKGC, for short—will shut down any raffle that it finds to be considered an illegal lottery. Generally, according to the law, selling tickets to win a prize means you’re running a lottery, so you’ll have to apply for a licence from the UKGC before you can ever actually set up a house sale by raffle.
Selling your house by raffle isn’t illegal because on the whole, prize-based competitions aren’t regulated by the UKGC, so house rafflers are able to operate under that legislation without getting in trouble with gambling laws as a whole. Prizes and lotteries are classified differently because lotteries require ticket buyers to exercise a skill to qualify for entry. They may have to choose numbers or answer a question. Prize competitions, though, simply require the purchase of a ticket.
The UKGC isn’t the only group who can step in to stop a house sale by raffle, though. The Advertising Standards Agency – or ASA – may also enter the picture if the marketing you create around your house raffle is misleading. For example, if you omit any information or present some falsehood while selling your house by raffle, the ASA could step in. You will need to adhere to the Committee of the Advertising Practice code during your raffle, and if the ASA suspects you’re doing anything amiss from that code, you will lose the ability to operate your raffle. Additionally, if any government entity finds you are breaking money-laundering rules or redress rules, your case will be referred to the National Trading Standards Estate and Letting Agency Team. This organisation protects consumers through the enforcement of the Estate Agents Act of 1979 and the Tenant Fees Act of 2019. While they primarily regulate estate agencies and letting agencies, they also oversee any disputes in the real estate sector, and that applies to these house raffles.
Property raffles come with lots of rules and regulations, so while the answer to the question “Can I sell my house by raffle” is a resounding yes, before you decide to host one, you may want to work with a solicitor to be sure you’re creating a raffle that can actually be held legally. If you don’t, you could face quite a bit of legal action, putting you a bit further back from where you started selling houses by raffle in the UK.
The Benefits of a Property Raffle
Why would anyone want to sell their home in a property raffle? There are actually a number of different reasons you might say “I’d like to sell my house by raffle”. It may be a non-traditional option, but it provides lots of opportunities. For example, if you have a fairly high-dollar property, and finding the right buyer would take quite a bit of time because most people simply don’t have the means to purchase it, a property raffle might be the right choice. Similarly, if the property has high maintenance cost or is generally hard to sell on the open market, those who would like to enter the property market as an investor might take a chance on a small raffle ticket versus actually paying the purchase price for the property. Other places that have been selling a house by raffle tickets have been successful because they feature unusual properties with a unique history. For example, homes, where historically violent acts were done, may not be right for the average buyer, but there is a type of buyer who would be quite interested in that type of home and willing to pay a small amount for a raffle ticket to buy that house.
Maybe the biggest reason people consider whether they should sell a house by raffle, though, is the reason they were started in the first place. In situations where the property market is slowing considerably and the economy is in a state of struggle or there’s a serious recession, a property raffle might just give your home the perfect way to get sold without working through a traditional estate agent and watching it sit on the market day after day without any offers.
Sell House By Raffle – How It Actually Works
A house for sale by raffle must be organised by the homeowner themselves. There is no company which you can contact to organise this kind of raffle yourself, and it takes almost more work to sell your home this way than it does in the traditional manner. While there are raffle competition companies that may help you, you will need to do several things to make it happen. Initially, you must register your property raffle for lottery duty. Keep in mind that this step means you will have to pay 12% of the proceeds from your ticket sales to the lottery duty. You will then need to connect with a solicitor to be sure the terms and conditions of your raffle are actually sufficient to be legally compliant. It’s important that you don’t skip this step. The fines are quite heavy if you cannot comply with the legalities of selling house by raffle in the UK, so the help of a qualified solicitor as you define these terms is nothing short of a must.
The next step is to think about the ticket sales. You’ll want to consider both the deadline for the ticket sales – essentially the day you will no longer be selling a house by raffle tickets – and the number of sales. You likely have a minimum number of ticket sales you need to get before you can give the house away. Understand what that looks like as your current ticket sales price, and define it. If you don’t hit that, consider what the alternative prize might be. In most property raffles, the alternative prize is a cash prize. If you don’t specify these things in your rules, however, you will be forced to give away your home for only that which you’ve made on the property raffle itself. There is an alternative to this. You can specify in the terms and conditions that you will refund any tickets if you don’t actually sell enough to raffle the house off.
The final part of this is fairly easy. You’ll need to hold the drawing itself. These days, almost all raffle draws are held on social media, usually on a live setting. For example, you could use Facebook Live or livestream the event on YouTube. This is easily the way to go if you have a fairly large social media following. A good alternative, though, is to actually hold a live draw. In some cases, that live draw could be in conjunction with another local event to help boost ticket sales or improve attendance at the live draw.
Once you’ve drawn a ticket, you’ll just need to transfer the ownership of the property to the winner after your house sold by raffle is complete. You’ll work through your solicitor to complete this step, and it works a bit like the day of completion on a traditional property sale. Once things are completed, you hand over the keys to your home and walk away. Your house sold by raffle process is complete. After the property becomes legally someone else’s responsibility, they will be responsible for all of the associated costs like the council tax and the required maintenance.
Are There Drawbacks to a House for Sale by Raffle?
As with any method of selling your home, there are some potential drawbacks to selling your house in this manner. The biggest one is the fairly obvious one. Property raffles don’t always sell enough tickets to make you the money you want. If you can’t build enough interest in the property, you’ll be forced to pay out whatever the alternative was, and there may be other fees associated with that pay out that were unexpected. As a result, you may end up owing quite a bit of unexpected money.
There are other drawbacks, too, primarily legal ones. Many property raffles have been shut down by the UKGC, and that can be quite expensive. If the UKGC deems your property raffle an illegal lottery that violates legislation in some way, you will have your raffle shut down and you will likely owe a number of legal fines as a result of your actions.
It is also possible to owe some surprising unexpected expenses as a result of your raffle. If you don’t sell enough tickets, you’ll still have spent quite a bit on advertising and marketing. After all, it’s tough to attract people’s attention to your home without the right advertising and marketing, so you’ll spend money along the way there. You’ll also pay the solicitor’s fees initially to actually create a legal house raffle. Additionally, you may find other hidden expenses involved, like the taxes on the profits from your raffle.
The other real drawback of a house for sale by raffle UK residents have discovered is the sheer amount of administration time it takes to make it happen. There’s so much paperwork involved in this process. On top of that, you have to protect the data of every entrant, handle all of the associated administration for prizes, and manage the day-to-day during the raffle itself. It means an extensive amount of dedication and hard work.
Is a Property Raffle Right For You?
If you’re brainstorming ways to sell your home in a slow market, a house for sale by raffle – UK home owners have found – is an option, but it requires far more work than other more traditional home selling routes. Learning how to sell your house by raffle legally is key before you make a decision.