Home Selling Tactics: Contests

Home selling can be a tricky business in a struggling economy. When the value of homes decreases, some homeowners turn to unique home selling methods, such as offering their houses as a prize in a contest.

Types of Home Selling Contests

Home selling contests vary. Homeowners have been known to offer their homes in a random drawing, or require interested participants to write songs or essays that describe why they should be awarded the home.

Entry Fee

The homeowner must collect an entry fee from each participant. The goal is to get enough entries to cover the sale price of the home. For the homeowner to get enough entries, he must spend money up front to make the public aware of the contest.

The Legality of Home Selling Contests

Some states prohibit homeowners from using a lottery or contest to sell their homes due to a high potential for fraud. Before an individual begins marketing his home as a contest prize, it is crucial that he consult with a lawyer to evaluate his state’s rules regarding pay-to-enter contests. In addition, a home selling contest cannot continue until the homeowner recovers enough entry fees to pay off his mortgage. The individual hosting the contest must set a definitive beginning and ending date for the competition. Should the homeowner not receive enough entries to make the contest worthwhile, he is legally obligated to return each participant’s entry fee.

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