A Complete Guide To Property Raffles

Selling your home is no easy feat, with thousands of UK homeowners looking to flog their properties amidst a highly concentrated market, many factors can get in the way of your property sale. From unsettled economies to Japanese Knotweed, Brits are increasingly looking for new ways to overcome their property woes and sell their homes fast – and property raffles are quickly becoming a popular way to do so.

However, many Brits remain in the dark about property raffles. We’ve put together this detailed guide to property raffles and whether they are a good idea. Fortunately, SellHouseFast are on hand to give you all of the answers.

What is a ‘Property Raffle’?

‘Win a House’ prize draws and competitions, better known as property raffles, are another innovative way of selling your property to prospective buyers. Put simply, property raffles are exactly what they say on the tin – a competition which allows prospective buyers to win the chance of owning a property for as little as a few pounds, via the process of a raffle. They are a slightly more unconventional way to sell your property and are favoured among some homeowners that are struggling to budge their property.

On a basic level, property raffles are a great way to benefit both the seller and the vendor, since not only could one lucky buyer get a property for the spare change in their purse, but vendors also have the opportunity to rake in thousands more than the property’s recommended price, with thousands purchasing raffle entries.

As a general rule, hopeful individuals purchase a raffle ticket (or multiple) in the raffle competition. As with any raffle, a raffle ticket is then chosen in a draw. Whoever the chosen raffle ticket belongs to is the new property owners, typically bagging themselves a bargain property!

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Who do vendors choose to sell their home via a Property Raffle?

As the experts in challenging property sales, we have observed plenty of reasons why buyers might choose to flog their home through a raffle.

More often than not, it is because their homes sit on the market for years before gaining traction, meaning homeowners are keen to sell their properties faster than possible through traditional estate agents, with property raffles offering some people this opportunity.

In particular, some of the reasons why homeowners struggle to sell their house are as follows:

How does a House Raffle work?

Most typically, property raffles in the UK are arranged sales by the homeowners themselves in a desperate bid to shift their properties. However, as they have gained popularity, some agencies and businesses have become a platform for property raffle sales. The raffle tickets can range between anything from £2 to hundreds of pounds. The raffle listing will usually be advertised online with pictures of the property interior and exterior.

Any sellers looking to raffle their home must first ensure that they have registered properly. Under the law, you will have to register for lottery duty (which deducts 12% from your raffle ticket sales) and have sufficient terms and conditions for the raffle. Since this is very technical, it is always a good idea to involve a qualified lawyer to check your raffle is compliant with all necessary requirements and conditions – else you might face a hefty fine.

Tickets will continue to be sold until an outlined deadline or until the minimum number of tickets are sold. In the possible event that too few raffle entries have been sold by the closing date, either a cash prize might be awarded in place of the property or the raffle might be closed altogether, with all ticket costs refunded. Information on this will always be disclosed in the Terms and Conditions of the raffle itself.

On the event date whereby the winning ticket is drawn from all of the sold raffle tickets, the winning ticket owner is awarded the property. This process involves the title of the house being transferred to the winner along with all other property responsibilities relating to the house.

Although it sounds exciting, it is a very complex process, contrary to what many think.

Can I raffle my house legally?

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Broadly speaking, property raffles can be legal. However, this is contingent on quite a few measures being properly implemented and certain specific conditions being met, which makes them all the more complicated…

Technically, raffling your home is completely legal, but it needs to be permissible. Since gambling is a highly regulated commercial space, there are plenty of laws prohibiting certain gambling practices’. In fact, in 2007, The Gambling Commission warned that many property raffles ran contrary to gambling laws and that these would either be shut down entirely or tweaked in order to be compliant.

More often than not, these house raffles become illegal since they become a lottery according to the law, not a raffle. In a bid to get around this issue, many property owners are instead donating a share of the raffle returns to charities, or adding a question which must first be answered correctly before you are entered into the draw in order to turn the raffle into a competition instead.

On the whole, however, house raffles in the UK remain a new, evolving and therefore grey area of the law and are still heavily regulated. For all of these reasons, it is essential to consult with a solicitor when looking to raffle your property. However, it can easily be seen how this might eat further into your returns. Yet the hefty fine of £5000 or prison sentence given to those that run unauthorised lotteries naturally makes this a wise choice.

Regulations on Property Raffles

Lotteries cannot be run for private profit, such as selling your home.
Lotteries are a game of luck, whereas competitions involve some element of skill. The Gambling Commission takes the view that the question shouldn’t be too easy, but nor does it need to be too difficult either in order to be compliant with gambling regulations and be classified as a competition.This is to satisfy the rule that competitions based on luck alone cannot raise money for the homeowners as these are private individuals.
However, if money was donated to charity, this element of skill would be unnecessary as a lottery is permitted in this situation. Any charities must be registered charities and state either their Charity number or ‘A Registered Charity’ where listed.
Raffle ticket prices must be the same for each voucher according to the law, so all individual tickets must be priced at the same fee to enter.
Entrants must only be able to enter if they live in a country where the raffle is legal, since in many countries this kind of competition is not.
The raffle has to be both transparent and fair. It must be clear where and when the draw will take place and results must be openly publicised, albeit not necessarily by identifying the winners’ names.

Again, property raffles are very contentious so it is always important to seek legal advice before commencing your property sale in this way!

The advantages and disadvantages of Property Raffles

Advantages

Due to the uncommon nature of home raffles, these get a lot of local and regional publicity, particularly from the press. In many cases, we have seen property raffles go viral, garnering plenty more tickets sold than expected. In these events, ticket sales are often relatively high and certainly cover the cost of the property.
It is an unconventional way of selling a property that won’t sell easily through traditional means due to issues such as a poor economy, the local area, a considerable amount of maintenance and upkeep required or the need for relatively fast cash. All of these issues are often overlooked by punters wanting to bag a home for as little as £2!
Depending on how clearly the terms and conditions are drawn, there is some assurance that you will not need to transfer your property to a winner where not enough tickets have been sold to make it worthwhile by the closing date. Instead, you will either be expected to give away an equivalent cash prize to the money raised or to refund all tickets. For many, this peace of mind is important!
Some actually dream it to be less hassle than a sale that involves chains and mortgage lenders.

Disadvantages

Many people are wary of entering property raffles since the cost of the ticket is often not the only cost they incur. For example, just because you won a property in a raffle, that does not mean it isn’t subject to certain permissions, licenses and additional charges, such as the stamp tax. Many buyers are reluctant to buy or play for a property with plenty of strings attached, so the raffle may not prove as popular as you might hope. As a result, many homeowners end up failing to meet the ticket sales quota and wasting their time.
As we have just read, property raffles are a legal land mine and a difficult one to navigate! Hiring a solicitor or legal advisor to do something as basic as draw up a contract or terms and conditions can be incredibly pricey if your property fails to sell!
In order to sell the most tickets possible, you require a great deal of advertising, which can also prove relatively expensive over a period of time, hence cutting even more money from the potential profit of the property sale.

How risky are Property Raffles?

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Despite appearing straightforward and exciting, property raffles can prove fairly risky for homeowners looking to sell their home. Not only are they required to pay for pricey legal advice and advertising costs in order to get the raffle seen and permissible, but these costs will not be returned in the event that the property doesn’t meet enough ticket sales for the quota, therefore leaving many homeowners out of pocket.

What’s more, those of us looking to shift our homes fast will find the process to be very demanding and time consuming, only for this time to potentially go to waste later if the property raffle doesn’t go ahead.

In terms of legality, there is a lot to consider and a hefty risk of either almost a year in prison or £5000 fine for illegal lotteries, making property raffles among the riskier ways to sell your home.

What does the future of Property Raffles look like?

Property raffles in the UK have only just become known, with only a small number of individuals choosing to sell their property in this way. However, with stories of home raffle success plastered in the media, they are slowly becoming more and more popular due to their exciting and unconventional allure.

Whilst the law on selling your home via a raffle is still very much grey opposed to black and white, we should expect some further clarity on the law on property raffles in coming years as these ‘win a house’ games of chance become more common.

Increasingly, platforms are being devised to organise raffles on behalf of eager homeowners. The most commonly used of these is RaffleHouse, which gives sellers and entrants slightly more peace of mind. However, the growth of these is yet to be seen and can be expected in the coming years.

Should I sell my home in a Property Raffle?

So, should you sell your home in a property raffle? As we have heard, it is a risky and complicated affair, more challenging than many vendors initially imagine. Once the novelty of the raffle element wears off, many homeowners are left with large pay-outs for advertising and legal fees, all of which still doesn’t guarantee a sale. To put it simply, selling your house using a raffle is no easy feat, and there are likely more effective and cost-efficient ways of selling your home.

It is fair to say that property raffles aren’t up everyone’s street, and they’re yet to be as successful as we would like. Fortunately, there are plenty more ways to sell your home fast with the help of the experts at SellHouseFast – we can turnaround your property sale within as little as 4 weeks! So if you’re looking to shift your property for a fantastic price, contact our team today for a free valuation and offer.

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