How much for that 4,500-square-foot, six-bedroom, heavily remodeled 1852 cabin on two acres of land?
How does $50 sound?
That’s what Edgewater residents Tom and Dianne Walters are asking for a raffle ticket for their home just off Route 2, appraised this summer at $1.2 million. Rather than take their chances in a dicey real estate market, they decided to hold a raffle drawing Dec. 31, which has drawn national media attention.
They’re not alone — Maryland has been at the forefront of a new trend of home raffles, thanks to laws that are simpler and more lenient than other states.
The Walters bought the original 1,600-square-foot cabin in 2006 and completed massive renovations, which added nearly 3,000 square feet to the home, this summer. But the effort tapped the family’s finances, forcing them to think about selling the house.
“It was a classic money pit,” Tom Walters said. “There’s a reason people make movies about this kind of thing.”
He said two homes down the street were similarly priced but met with very different results. One sold at full price within five weeks.
The other languished for months with little interest.
“There’s such a wide range of success at this price range,” Walters said. “We saw those results and said we could throw it on the market or we could try something different.”
The Walters need to sell 31,500 tickets to break even, and have sold 6,000 so far, Tom Walters said. He said the raffle’s Web site, www.fiftydollarhouse.com, has been bookmarked 17,000 times and that a drawing would happen on Dec. 31 as planned.
Under Maryland state law, a raffle of real property must be done by a nonprofit organization, such as Annapolis-based We Care and Friends, which will benefit from the Walters’ raffle. The 31,500 tickets would cover the cost of the house, the closing costs and raffle costs, though the winner would be on the hook for income tax because the home is considered winnings.
Home raffles have become most prevalent in Maryland and California, where laws allowing the contests are the least complex, said Ser Greene, a Baltimore resident who co-founded www.usahomeraffle.com earlier this year.
Greene hopes to turn the Web site into a clearing house for those seeking to raffle their home and non-profits trying to partner with homeowners. Six raffles are currently listed, and Greene said he’s handled eight raffles so far with one making it to closing — some fail to sell enough tickets to hold a drawing. But Greene said he believes the idea will continue even if the housing market improves.
“I think [raffles are] definitely going to stick around,” Greene said. “Probably the main reason being that it allows people to sell their homes in a certain amount of time without going through the normal amount of hoopla.”
One of the first homes in the state to be raffled was the Hancock farmhouse of Karen Crawford and her husband Dennis Kelly. They bought the home for $379,000 two years ago but could not sell the house after more than a year.
The couple partnered with Boonsboro-based San Mar Children’s Home, which operates group homes for youth. They began promoting the raffle in December and sold 6,500 tickets by March, covering the cost of the home and generating more than $200,000 for San Mar.
Their raffle inspired the Walters and others to hold their own contests, and even caught the attention of Oprah, who discussed doing a show on the sale. San Mar plans to hold a how-to session in Baltimore on Nov. 7 as part of the Maryland Association of Non-Profit Organizations’ annual conference at the Hyatt Regency, San Mar President and CEO Bruce Anderson said, and a book is in the works.
Anderson said since that first raffle he has fielded hundreds of calls from homeowners asking him to raffle their home. However, he said the process is extremely risky, and said he was not aware of any raffles that have succeeded since his.
“It’s the desperation out there,” Anderson said. “It really is high-risk. A lot of people are jumping into it … people don’t hear that.”
Walters said he knew going into the raffle that the local non-profit would benefit, gaining at least 10 percent of ticket income, and his own family would be able to recoup what they spent. But he said there was an unexpected benefit, and recalled a woman who said she was in public housing and paid for the last $5 of her ticket in single dollar bills.
“The benefit we weren’t expecting was the hope, when we sell a ticket,” Walters said. “Some are naysayers, saying, ‘I won’t win, but I’ll take a shot.’ Others come to the open houses and are planning where to put their furniture when they win.”
ARE YOU FEELING LUCKY?
For more on home raffles, go to:
• Tom and Dianne Walters’ home raffle page at www.fiftydollarhouse.com
• Maryland entrepreneurs Ser Greene and C. Tyree Powell’s www.usahomeraffle.com
• Maryland’s regulations governing home raffles at www.sos.state.md.us/Charity/Raffles.htm
