Real Estate Takes A Lesson from Malibu

I grew up in a Southern California coastal community not too far from the famed beaches of Malibu. It was a nice little community that lacked the glamour often associated with Malibu, yet still had many of Malibu’s accoutrements including killer surf breaks, traffic, weekend star-gazers (though there were no stars living in my neighborhood), and even the fires and floods. Every autumn, with the return of those pesky Santa Ana winds, fires would ravish the canyons around us, and every winter, the rains would come and take every last bit of burnt soil from the previous months and promptly deposit what was left of those dead hills into our living rooms, kitchens and pools.

One thing that Malibu had that my neighborhood did not have, was an old fashioned county fair. Complete with rides sponsored by the likes of Cher and Steven Spielberg, food by Wolfgang Puck, and a petting zoo that rivaled any metropolitan city zoo that I have ever seen, Malibu certainly knew how to throw a proper fair. But aside from the things you would come to expect at such a Malibu soir?e, one item always caught by attention. It was the raffle for a brand new Porsche.

At $100 dollars a raffle ticket, you too could enter to win a brand new Porsche. With a sticker price of around $90,000 dollars for the particular model they were giving away those days, it seemed like a pretty good bet. They would sell hundreds of raffle tickets, and with proceeds going to charity, they were able to pay for the car and donate substantially to the charity of choice for that year as well.

I bring up this trip down memory lane because just today I heard about a woman that has placed her house up for raffle. Starting with a web site to direct traffic leads, this woman created an opportunity for a person to purchase a 1 in 4,000 or 5,000 chance to win a mortgage-free home. At the cost of about $100 dollars per raffle ticket, she has already raised enough money to cover her debt.

This is not the first time people have been turning to alternate methods to sell their homes. A couple in Maryland also went the raffle route, charging people $100 dollars to enter the raffle to win their 2,700 square foot home. With well over 6,000 raffle tickets sold, the couple got what they wanted for their home and a good chunk of additional money that they donated to charity. The house, which appraised for almost $400,000 dollars approximately 2 years ago, had been on the market ever since. To the Maryland couple, it was the perfect ending to what could have been a nightmare scenario if home values continued to fall.

But do not go and print up your raffle tickets just yet. There are some legal issues that need to be understood before one can place their home up for raffle. For one, most jurisdictions would consider the raffle a form of gambling, and are therefore highly regulated. As such, very strict guidelines need to be met in order to advertise and promote the raffle…including where and how raffle tickets are sold and distributed.

I did an internet search on home raffles and was surprised at how much information was available to the consumer about this topic. Most people view the raffle as a way to avoid inevitable foreclosure or obtain a house free of debt when it is nearly impossible to get a loan for a home these days in the first place. In searching online for information on how to raffle a home, however, it is evident that many people are still looking for the answers rather than providing an actual step-by-step guide.