House Raffles for Charity: How to Know What Your Ticket Buys
It's one of several home raffles that charities have been using in recent years to raise funds.The goal in this case, Taylor said in an interview, is to raise enough capital to buy I Am Now a home of its own, one that will house transitional youth coming out of the foster care program who are struggling to get on their feet. To do that, Taylor plans to donate his own home -- a $450,000, 6,000-square-foot spread he built himself -- to whomever holds the winning $100 ticket. While the winner will get the home mortgage-free, they would still be required to pay taxes on the property.
Drawings for a $10,000 and $5,000 cash prize will also be held.
Before buying a ticket in a home raffle -- even for a good cause -- it's important for potential owners to know all the particulars though.
Taylor isn't the first homeowner to raffle off his home. With the housing market still snail slow, an increasing number of homeowners are turning to raffles as a means of moving property. Earlier this year a Colorado man raffled off his $1 million home to benefit local animal shelters and food banks while a San Francisco home worth a sweet $3 million will go to one lucky winner on June 25.
Before purchasing a ticket, Neil Garfinkel, a real estate attorney with Abrams, Garfinkel, Margolis, Bergson, LLP in New York City, says potential homeowners need to do their research.
"[Participants] need to verify that the raffle is legal first," says Garfinkel. "There have been a couple of raffle scams out there. Secondly, they need to ask who's holding the money for the sale? What costs are associated with the transaction? Who's covering the closing costs and what are the ramifications of ownership?"
Since states vary tremendously in terms of how they handle raffle transactions, Garfinkel urges ticket purchasers to contact their state's housing department to verify that the raffle is legal then contact those overseeing the raffle transaction and ask for a copy of the housing contract.
"This kind of thing is definitely not something we see in the mainstream, so you have to check into it a little bit more," Garfinkel states. "It would be terrible to spend $100 on a ticket and get scammed."
I Am Now assures participants its intentions are pure. "This is a win-win situation," Taylor said. "Someone is going to get the ultimate prize, but just by participating in the raffle you are contributing."