Get A £1m Home For £25
The Fool examines a novel way to get your hands on a fantasy home - and looks at what it means for selllers...
OK, I admit it. Sometimes, after a hard day at work, I like nothing better than to come home, put my feet up and engage in an hour or two of property porn.
Sometimes, it's the high-faluting insanity of Grand Designs I lust for. At other times, it's the fun and frolics of Location, Location, Location or Homes Under The Hammer* that tickles my fancy. And, when I really get in the mood, I'm off to rightmove and zoomf, for a sneaky peak at any properties in my neighbourhood that are on sale - even if they are way, way out of my price range.
What can I say? I enjoy noseying around people's houses without leaving the comfort of my own home. Not just because I'm a naturally very nosey person (well I wouldn't be a journalist otherwise, would I?). Because I find fantasising about property. well. fun.
(I realise this makes me quite a pathetic person. But then again, I do write about mortgages and insurance and pensions for a living. Clearly, I'm never going to be cool.)
So when I heard that two homeowners - one ex-Grand Design couple from Cheltenham and one Devonshire couple with 11.5 acres and a lake - are selling their £1m properties for the princely sum of a £25 raffle ticket, I was intrigued, to say the least..
The properties
Property 1: Known simply as `The Cheltenham House' to Grand Designs followers, this property is described as "a meticulously constructed, modern townhouse in the heart of Cheltenham". It's got three bedrooms, comes fully-furnished and is designed for `eco-friendly living'.
My favourite feature: An amazing subterranean playroom with patio doors onto a courtyard and grass on the roof!
Cost of a raffle ticket: £25.
Website: winthecheltenhamhouse.com
Property 2: The Oldborough Retreat is a five-bedroom detached house with 11.5 acres of Devon natural woodland, four 2-bed timber lodges and a 2-acre coarse fishing lake.
My favourite feature: It's got to be the huge lake. (Not only would I be living in my own private property fantasy, I could throw in a Mr. Darcy fantasy for free!)
Cost of a raffle ticket: £25.
Website: winadevonpropertywithfishing.co.uk
How it works
Both competitions are similar. You answer a simple factual question (the answer can be found in less than a second on Google), and pay £25 over the internet using Paypal or a credit card. You are then entered into the competition and stand a 1 in 46,000 chance of winning the property as the prize. If you win, the cost of stamp duty and the conveyancing you will have to do will be paid for - you simply need to turn up and take the keys!
How come I can be so specific about the 1 in 46,000 odds?
If you look in the small print of the terms and conditions, it explains that the promoters are entitled to retain 35% of the entry fees to cover their "administration and marketing expenditure". This means that, if they do not sell 46,000 tickets but you win the competition, you will only get 65% of the money received from entries - and you will not get the house either.
So if only 40,000 tickets were sold - not far off the target - you would only receive £650,000. Not enough to buy a £1m house by any stretch of the imagination.
Still, it would be substantially more than the £25 you put up to enter.
So, should you enter? It depends whether you fancy your chances at 1:46,000 odds. Like any other raffle, it's a gamble and - as always - you should never gamble any money you cannot afford to lose.
A good way to sell your home?
No. While I think that these two particular properties may succeed in achieving their 46,000 target, this is partly because they are getting a huge amount of free publicity from property journalists (like me), and partly because they own unique fantasy homes which appeal to property porn addicts (also like me).
Most homes will not attract nearly enough people to stand a chance of making enough money from entries to pay the promoter's costs and the market value of the property. So the whole exercise will be relatively pointless.
There are also complex rules around competitions and if you fall foul, you will be breaking the law. That's why, for example, the competitions for these homes ask you a relatively random factual question before you can enter - it must be seen to be a competition of skill, not merely luck.
What is the significance of these competitions?
Whether or not you plan to enter, I think the very fact that homeowners are running these competitions just goes to show what a desperate state the property market is in.
The Oldborough Retreat, for example, was being devalued by £12,000 a month when on the open market - hence the owners decided to offer the raffle instead.
If even fantasy homes cannot be sold easily, what hope do the rest of us have?
Looks like it's time to start dropping those asking prices..
*Yes I do realise that Homes Under The Hammer is a daytime show. I have actually gone to the lengths of downloading it from BBC iPlayer!
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Comments
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About this topic, I know everything. Hab was Volker Shtina and thought he was getting rid of illiquid property and called the site winyourhome The following year came the competition http://www.contestswinmoney.info and began to publish such projects. Also, a project winanewlife, only the organizer could not gather the required number of tickets and had to return the money. This is true, and gives credibility in the eyes of participants. Thanks for the article and good luck.
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Hi themis, In the end the oldborough retreat competition completed successfully so it has been demonstrated on the marketing side that it can work: you can sell all those tickets if you appear on TV and get the right PR etc. I think they even sold out 2 months early before having all those problems with the gambling commission. The key thing you allude to is trust, something that is definitely lacking in many cases. I think that involving charities more so that they run the raffles (and take the profits) could make a lot of sense over here, like in the US: http://winahouseraffles.com/blog/organizing-house-raffles/30-house-raffle-brings-charity-back-into-profit.html At least it would help address some of the concerns about trust. But I think you can't raffle something very valuable in the uk (even if you're a charity). I don't thing the argument about odds is relevant insofar as lots of people spend £10, £20+ in the national lottery with much worse odds of winning. But you're right about the timing you can't expect anyone to wait around for months for things to close that's crazy!
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No way is it to do with simply throwing a huge amount of money at marketing your house competition....Look at The Bawtree's, you can't get much bigger marketing than being featured on one of the most popular and most watched programmes on British TV.. But they still only sold 5700 tickets. I think the bottom line is that people are unwilling to spend £25 on something they are 99.9% probably not going to win.. this isn't the national lottery, £1 for a lottery ticket may only give you a miniscule chance of winning a huge amount of money, but £1 is nothing, and the competition is weekly....People aren't stupid, they won't spend £25 on a competition that takes months to close and could be illgal and stopped at any time. Add to this the shifty T&C's of most of these competitions "expenses" that the organisers get to keep and people run a mile. Remember... NOT ONE OF THESE HOUSE COMPETITIONS HAS YET BEEN SUCCESSFULL IN THE UK. It's nothing to do with marketing....just common sense on the part of the general public that keeps these hairbrained, get rich quick schemes from making their organisers a quick buck.
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06 February 2010