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When you are trying to decide which method to use for selling your house, flat or other type of property, you could consider the unique option of using a raffle to find the buyer. This guide explains the pros and cons of trying to sell a home by raffle, and also outlines alternative options available for how you may be able to get a quick and fair offer from a buyer.
- What does it mean to sell a property by raffle?
- The legality of using a raffle to sell your house or flat
- Benefits of trying to sell a home through a raffle
- Drawbacks of using a raffle to sell a property
- Alternatives to a raffle for selling your flat or house
- Frequently asked queries about selling a home by raffle
What does it mean to sell a property by raffle?
When you are looking to sell your home, particularly on a fast schedule for an important reason like paying for care or needing funds for a move to another country, it can be frustrating if few buyers are showing interest.
Your stress might increase depending on the method that you’re using to try to sell your home, as it could take over a full year to find a buyer when you sell through an auctioneer or an estate agent, or you sell without any third-party help. That has prompted a few homeowners to consider whether raffling their properties might be a simple and potentially speedy solution.
Raffling a home works the same way as any generic raffle, meaning that you will offer people the chance to buy individually numbered tickets ahead of a deadline for the day on which you will hold a prize day. On that day, you’ll randomly select a single ticket and the person who purchased the ticket with that number will be deemed the winner of the raffle.
At that point, the winner is legally designated as the next owner of your property – even if they only paid a few pounds for a single ticket. The potential for such a profitable outcome for buyers, particularly for otherwise expensive properties, is one reason why raffles are sometimes used.
In one recent example, a six bedroom house is being raffled in Scotland that also features a golf simulator, private cinema and many other luxuries is estimated to be worth over £3.5 million, according to the Daily Record. That means someone who potentially spends just a few pounds on the raffle will have the chance of winning ownership of the property.
But there are a number of potential disadvantages associated with raffling your home, and this guide will explain those hurdles and other issues that can arise with this method of selling.
It also offers important tips for those homeowners who decide that a raffle is not a suitable way for them to find a buyer for their properties. For example, it provides advice on simple and speedy methods for selling a flat or house, such as contacting a quick home buyer like LDN Properties that could complete the process of buying your home within a few short weeks.
The legality of using a raffle to sell your house or flat
A raffle to sell your freehold or leasehold property involves people buying tickets in exchange for a chance at being randomly chosen as the winner of the home, and this financial transaction raises questions about whether this method of selling a flat or house is legal.
Generally, the concept of raffling a property is not prohibited by law, but it will have to comply with regulations issued by the UK’s Gambling Commission, which licenses individuals and businesses that provide the option for gambling – and that includes raffles, which are a type of gamble.
The rules for creating a raffle to sell your property can be quite complicated, and trying to ensure that the sale of your home fully complies with these policies can be incredibly stressful, and avoidable if you were to choose another method to find a buyer for the property.
Also, the Gambling Commission could monitor the sale of your home through a raffle and if it determines that the competition does not comply with its regulations, it could block the raffle from happening, and even impose significant financial fines on you for violating those rules. You want to avoid this outcome because it would not only cause the sale of your property to fall apart, but it could greatly increase your selling expenses if you end up having to pay fines.
If you are determined to proceed with a raffle to sell your home, it can be a good idea to consult with your solicitor or other legal representative to ensure you’re complying with the regulations.
Benefits of trying to sell a home through a raffle
If you are thinking about using a raffle for the sale of your leasehold or freehold house, flat or other type of property, the good news is that there are a few advantages of this approach.
The pros of selling a home by raffle might be outweighed by the disadvantages, which the next section of this guide explains in detail. But depending on your unique wants and needs with selling, you may find that any or all of the benefits below justify proceeding with a raffle.
Shorter schedule: When you launch a raffle to sell your home, you get to choose the deadline for entries, and this means that you could manage to have a confirmed buyer within weeks – if the raffle succeeds. Although there is no guarantee of that outcome, such a schedule would be much faster than other methods of selling, like trying your luck with an auction, that can often take many months. That can be enticing for those owners who want to sell their properties as quickly as feasible.
Overcome struggles: Your home might be struggling to sell, and there can be many reasons for this, such as a structural flaw with the property, a slow housing market and more. Perhaps you have tried other methods of selling and you’re not attracting much interest. In that case, a raffle could be a novel way to get people’s attention and potentially sell your home, helping you to overcome whatever struggles have prevented you from finding a buyer up until now.
Price increase: If you own a property that is particularly sought after, you could end up selling many raffle tickets, to the point where the money you take in from those sales far exceeds the price you would have been able to get for your house or flat using alternative methods for finding a buyer. Just remember that there is no guarantee of this outcome happening, but it helps explain why raffles can be seen by some homeowners as a lucrative opportunity.
Drawbacks of using a raffle to sell a property
Although there are a handful of advantages linked with selling a house, flat or other type of property at a raffle, it’s vital to understand that there are also some disadvantages.
Being aware of the several possible drawbacks of using a raffle to sell your freehold or leasehold home is essential before you commit to this method for finding a buyer. You may discover that one or more of the cons listed below is enough to justify you no longer wanting to raffle your property, in which case the next section of this guide offers alternative options.
High costs: In order to generate interest in your raffle, you will need to let people know that it is happening, and this will require extensive advertising. For those homeowners who are looking to sell many tickets and hopefully earn a nice profit on the sale of their property, the costs for promoting the raffle and other expenses could quickly add up, and in a worst case scenario even result in you only breaking even on the sale or selling your house or flat at a loss.
Unprofitable sale: There is no way to ensure that you will sell enough raffle tickets to make the sale of your home profitable, and if you experience very low ticket sales then you might be at risk of selling the property for far less than its actual worth.Yet under the legally enforceable terms of the raffle, it’s likely that you could not halt the sale. This would be a significant setback for those homeowners who are looking to maximise their potential profit when selling a property.
Complicated progress: Because raffling your home is a type of gambling, where people pay for tickets with a chance to win the ownership of the property, you will be subject to complex rules and other restrictions, as the solicitors at Newport Land & Law note in a blog post. This can create a lot of stress for you, particularly if you make a mistake on any steps that violate the guidance, because this could then create uncertainty about the legality of the overall sale.
Alternatives to a raffle for selling your flat or house
After reading this guide, you may determine that a raffle is not how you’d like to proceed with trying to sell your home. If that’s the case, your alternative options are selling to a quick home buyer, selling on your own, selling at an auction or selling with an estate agent.
You’ll see that there are clear advantages linked with some of these methods, for example not having to pay any commission when selling your home to a legitimate zero-fee quick home buyer like LDN Properties. Other methods of selling have some notable cons, such as the unpredictably of whether you’ll make a profit when selling your home at an auction.
To identify the selling choice that most closely pairs with your needs, start by noting your top aims with selling, including how long you are prepared to wait, your ideal selling price and whether you can accept paying any commission. Then compare this information against the details of the four alternative approaches below to find the best match for your scenario.
Selling to a quick home buyer
Quick buyers are known for making fast and fair offers to purchase almost any home, regardless of its age, condition, location, shape or size. By way of example, since launching more than 15 years ago, LDN Properties has developed a varied list of purchases and offers across the UK that includes unmodernised properties, flats with elevated levels of radon, houses with council tax arrears, properties that are located on a private road, homes with faulty wiring, flats in a building that does not have any lifts, houses that are built near to power lines, properties owned by smokers, flats with noisy neighbours, homes situated near to a railway station, and many others.
These companies are called quick buyers because they can finalise the process of purchasing a property within a few weeks, and that covers exchanging contracts and paying you the proceeds. It’s often by far the quickest of the alternative methods for finding a buyer.
When you sell to an honest no-fee quick buyer, you’ll also get the benefit of not having to pay any commission, which lowers your costs and ensures you get to keep the full sale proceeds. That compares favourably to the fees you’d have to pay with an auctioneer or estate agent.
To give you additional peace of mind when selling your home to a quick buyer, ask individual companies if they are registered with The Property Ombudsman (TPO), an independent organisation that publishes policies which are designed to protect homeowners against falling for scams in the quick property buying industry. All genuine TPO members must follow these rules, which offers you more protection when selling.
You can check the membership status of any quick buyer by visiting TPO’s website, and then clicking on the "Find a Member" button on the left side of the welcome page. Then you’ll be asked to type in the name of a specific company. After you do this, you will be shown the quick buyer’s membership details, if they are truly registered like LDN Properties.
If you don’t get any results then the company is not a member of TPO, and you should not sell your house or flat to them because it could possibly be a fraudulent business.
Selling on your own
This can be a very stressful way to sell a home because you’ll need to do all the work to find a buyer. It starts with preparing a listing that describes your property and features photographs of the interior and exterior, and then you’ll have to advertise this listing. Next, you’ll need to organise listings to give buyers a tour of the property, and also hear any serious offers.
You won’t be able to simply do this work in your spare time, and that’s why you should only pursue selling without any help if you are experienced at finding buyers for properties, or a skilled family member or friend can assist you for free. Without such knowledge, it could take more than a full year before you are able to get a genuine offer from a buyer.
Selling on your own does have the welcome aspect of not having to pay commission to anyone, which initially will reduce your expenses. But you might find that this saving is cancelled out from the funds that you will have to use in order to advertise your listing.
Instead of this likely slow and expensive way of selling your home, you could consider selling to a quick buyer like LDN Properties. Not only will they promise to never charge you any fees, but they can also complete the sale much faster, typically within a few short weeks.
Selling at an auction
A third alternative to using a raffle to sell your home is trying your luck with an auction, where you’ll pick a reserve price – the lowest price at which you are comfortable selling – and then people will have the chance to place bids of increasing value on the property.
This is not a very speedy way to sell a house or flat, because there can be plenty of waiting involved, such as a delay of many weeks or months between the date that you choose to sell your property and the date when the auction is held. If your property manages to sell at the auction, the buyer then usually has about a month to sign the mandatory legal documents for the sale and complete their other tasks, which adds even more time to the process.
Auctioneers do have the advantage of handling most of the effort needed to sell your home, such as creating and marketing a listing and hosting the auction. But they will charge fees for this work, and that’s typically at 2.5 percent of a property’s auction sale price. The commission is right away taken out of the auction proceeds, which will add to your selling expenses.
Some auction houses could be willing to negotiate a reduced rate of commission for the sale of your home, or to have the winning high bidder be responsible for paying some of your costs, so you should inquire with individual auctioneers about whether this outcome is feasible.
Be sure to opt for a reserve price that should help you make a profit on the sale of your home, even after you’ve paid the auctioneer their fees. Otherwise you create the risk of selling your freehold or leasehold property break even, meaning that the final auction sale price is close to what you initially paid for the property, or worse, even selling the home at a loss.
Selling with an estate agent
The fourth and final alternative to selling a home with a raffle is getting in touch with an estate agent. Much like an auctioneer, an estate agent will be responsible for the vast majority of tasks required to sell your property, like making and advertising a listing, organising viewings and giving tours of your home, and ideally taking a serious offer to the exchange of contracts.
It can take quite a long time to find a buyer for your home when using an estate agent, and you should be prepared to wait for several months or even more than a year. That’s not a good match for those owners who are placing a priority on selling their property speedily.
And even for those property owners who get a genuine offer, the buyer could cause the sale to fall apart by withdrawing their offer – and they can do this without facing any penalties, as long as contracts have not been exchanged. If this happens, you will have to begin again with attempting to find a buyer, potentially extending your selling timeline by many more months.
Selling this way can also mean you’ll face higher expenses, because you’ll be charged commission from the estate agent, and this will be subtracted immediately from the sale proceeds. The average estate agent charges commission within a range of 1.15 percent to 1.40 percent of a property’s sale price, although some companies may charge even higher or lower.
Top queries and answers about selling a property by raffle
Homeowners thinking of selling their home fast can have some questions to be answered before making a decision. Here are some of the top questions we’re asked by people considering selling by raffle:
Your top questions when selling property by raffle
Yes, you’re allowed by law to sell a freehold or leasehold house, flat or any other type of property using a raffle. However, you must ensure the terms of the raffle are in full compliance with applicable regulations established by the UK’s Gambling Commission, because a lottery is considered a type of gambling, given that the winner is drawn at random from tickets sold.
You may find that there are some advantages linked to selling your leasehold or freehold property through a raffle, such as making a decent profit if many people are interested in owning your home and they purchase many tickets. A raffle can also be one way to solve the problem of a property struggling to sell, for example those homes that have structural issues.
There are several disadvantages that you might experience when trying to sell your home using a raffle, including the fact that you could fail to sell enough tickets to produce a profit on the sale of the property. Another possible concern is that the Gambling Commission could block the raffle from happening and impose fines on you, if it doesn’t comply with their regulations.
If you decide against selling your freehold or leasehold house, flat or other property using a raffle, then there are four typical methods available for finding a buyer. These include selling to a quick home buying company such as LDN Properties, selling using the services of an estate agent, trying your luck with a property auction, or selling without any external help.
Of the four selling methods available beyond a raffle, you’ll find that selling to LDN Properties or another quick buyer is the swiftest choice because it should only take a handful of weeks to complete. Selling on your own, selling with an auctioneer or selling with an estate agent are all slower methods that can take many months, and possibly even more than an entire year.
If you attempt to sell your property through an estate agent or an auctioneer then you will have to pay them commission, and this will increase your total selling costs because the fee is taken out of the final sale proceeds immediately. But if you decide to sell to a quick buyer like LDN Properties or sell without any assistance, then you will not have to pay any fees.
