Raffling Your Home
In this downturn economy some people who find it difficult to move house think of raffling their home. However, this isn't as easy as you may think, and in many cases, it's actually illegal.
The Law
If you think this could be a way for you to sell your home, the first thing you need to do is to find out what is the law in your state. Most states don't permit you to raffle off your house directly. You normally have to work with a non-profit organization (e.g. one registered as a 501(c)3) and make a legal agreement for them to buy your house at the appraisal value. They then use your house as a fundraiser prize and usually you work together to make the raffle a success. The organization then takes the profit over and above the appraisal value of your house. Of course, you will still have to pay back whatever you owe on the house from the money you receive from the sale. However, it is very important that you find out exactly how to run the raffle in your city or district as laws and bylaws can vary even from parish to parish. For example, the time when the non-profit organization must own the house can vary anywhere from before the raffle is started to just before the draw.
The Number Of Tickets
Once you have an agreement with the non-profit organization you then have to work out how many tickets to sell and how much to charge for the tickets. This depends on how much profit the organization wants to make after all the expenses. Ticket buyers need to know exactly how many tickets are on sale and when the raffle will be drawn.
For instance, if your house is independently appraised at $250,000 you could sell 7,500 tickets at $100 each. Assuming all the tickets sell, this would generate $750,000, giving the non-profit $500,000 less the raffle expenses, which includes the appraisal value of your home. However, you may prefer to sell fewer tickets at a higher price or more tickets at a lower price. Alternatively, the organization may be happier with a lower profit margin. These are all things to decide in advance as once you have announced the raffle, number of tickets for sale is fixed and you can't add more if the sale is going well. There also needs to be a contingency plan so that if a minimum number tickets aren't sold, buyers will get their money back. It is therefore important to allow sufficient time for the raffle to take place, for example six months.
How To Sell Tickets
If the non-profit organization wants you to help with the running of the raffle, you can think of all sorts of ways to sell tickets. Selling online is very appealing but may cause legal problems if you are selling tickets out of state. However, assuming your state permits online ticket sales, you will need a website with online payment facilities. Potential buyers also need to know that your raffle is not some sort of scam, which is where using a reasonably well-known non-profit organization can be very valuable. The more publicity both locally and statewide you can generate, the easier you will find it to sell tickets. Scrupulous accounting is essential as the non-profit will be subject to auditing, and they will want to keep the expenses as low as possible.
