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Ask the Real Estate Lawyer - September 20, 2009
By Ilyce Glink and Samuel J. Tamkin
Q: Regarding your recent article on house raffles, I'd like to respectfully point out that the story contains a lot of inaccuracies. I have just received approval to raffle my house in
A lengthy application process was required, and a nonprofit sponsor is required. You must have rules for the house raffle and for the transfer of the property. And if a pre-determined number of tickets aren't sold, the property doesn't change hands.
House raffles are complicated animals legally, but, by working closely with your state and local government, they are definitely possible and a way for the owner to sell their house for top dollar in a trashed market.
A: Thanks for your comment. We were surprised to get your e-mail, as most states have a strict policy against raffling off a house where the owner actually gets some or all of the money. To find out more, we contacted
Your house raffle is set up in conjunction with a charity that is either registered as a charity in the
In
According to Morris and Schlein, the charity involved must receive a benefit from the house raffle. A homeowner can't simply set up a house raffle and advertise it. The process is rather complex and requires an application with the
The
But the homeowner and the charity must abide by certain rules in proceeding with the house raffle. One of the primary rules is that the homeowner can't get more than the fair market value for his home. That fair market value must be determined within 90 days of the raffle by an independent appraiser licensed by the
So even if the raffle is hugely successful, the homeowner is limited in the amount of money he can receive from the raffle. And if the market is depressed, the homeowner may get less in a raffle than he might get by selling his home through the normal sale methods.
One additional item to consider, according to Schlein: If you're unable to sell sufficient raffle tickets and the raffle is unsuccessful, the raffle must be cancelled and the raffle participants must receive a refund of the amount they paid for the raffle ticket, less a small processing fee.
You should know that many other states require that all of the proceeds from the house raffle or lottery must be given to the charity and in other states, such games of chance might be illegal -- even when conducted by a qualified charity.
According to
McElroy indicated that the
In
According to the spokesperson at the
So while you may be able to conduct the house raffle in
While the real estate market has been significantly affected by the credit crisis and housing market collapse, the idea that a house raffle is another way to sell a house for top dollar everywhere in the country may be a stretch.
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Samuel J. Tamkin is a Chicago-based real estate attorney.
Ilyce R. Glink's latest ebooks are "Save Your House From Foreclosure" and "The Clutter Collector: How to Get Rid of Clutter Everywhere In Your House," which are available at her Web site, www.thinkglink.com. If you have questions, you can call her radio show toll-free (800-972-8255) any Sunday, from 11 am-1 pm EST. You can also write to Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022
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