Property expert warns homeowners against ‘nightmare’ way to sell a home – ‘it’s hard work’

Housing expert on ’nightmare’ of raffling your home

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Similar to a tombola, homeowners ask people to pay money to enter a property raffle. Once all the tickets have been purchased, someone will win and be the new owner of the house. The new owner will have paid a small amount for the home and the previous owner would have avoided estate agent fees.

Stamp duty fees may or may not be included in the prize.

For raffled homes, Capital Gains Tax is based on the value of the home on the date of purchase.

TV presenter and consumer journalist Alice Beer shared on ITV’s This Morning why raffling a property can be a “nightmare”.

Alice said: “Buy a ticket by all means if that’s what you want to do.

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“But say you’ve got a house that’s worth £300,000, you’e got to sell 60,000 tickets at a fiver each.”

If you don’t sell the amount of tickets you need for the price of the house, raffling a property can become complicated.

Alice continued: “You know what it’s like doing those school lotteries, trying to sell those school lottery tickets?

“It’s hard work! It’s hard work selling tickets.

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“If you don’t sell them all, you’ve suddenly got to offer a cash prize, you might have to give back the money.

“It’s just a nightmare. People have done it and have done it successfully.

“But not for me, thank you very much!”

Homeowners looking to raffle their home will need to legal advice to make sure they can raffle their home.

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Properties with a mortgage may not be able to be raffled off.

A property with a mortgage may need to have a higher asking price to break even, with homeowners risking ending up with negative equity.

Alison Hammond, who is stepping in for Phillip Schofield who tested positive for Covid, asked Alice whether people could make more money than their house is worth.

“You could do”, said Alice.

To do that, the homeowner of a £300,000 house would need to sell more than 60,000 tickets.

Alice’s final piece of advice to anyone looking to raffle of their home was to “read the small print”.

She said: “Read the small print and work out what works for you.”

For raffle entrants, there are risks to winning a house.

For example, stamp duty may still need to be paid, there could be outstanding bills and repairs.

The new owners would need to consider moving costs and stress, and the risks of moving into a home without a property survey being done first.

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