Can I really win a house for the price of a raffle ticket and are they safe?
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THERE are loads of online competitions springing up which claim that you can win a house by buying a raffle ticket, but some of them look too good to be true.
I'm tempted to enter lots of them as there's not much hope of me getting on the property ladder any other way, but I can't tell if they are just a scam.
Some of the home raffles I've seen are only a few pounds a ticket, but others cost up to £25, so I don't want to throw my money away if they aren't for real.
How can I find out if they're legit and are there any hidden catches I should watch out for?
Kelly Taylor, London
Leah Milner replies: For many of us who are struggling hard to save a deposit, winning a home for the price of a raffle ticket would be a dream come true, but you're right to be sceptical.
There have been a vast number of stories about people raffling their homes over the past year from castles to country mansions, but precious few about anyone who has actually won.
In fact, I looked at the results of lots of the win-a-home that have been advertised in the last 12 months and I've only been able to find one case where a property was actually given away as the prize.
The lucky winner was Marie Segar, who picked up a six-bedroom house in Lancashire last August after buying £20 worth of tickets from the organiser Dunstan Lowe.
But in many other cases the people raffling their homes have inadvertently fallen foul of advertising and gambling rules, forcing them to pull the plug on their competitions.
Some organisers have been forced to refund entrants because payment services like PayPal have said that such ticket sales are in breach of their terms.
And even if the prize draw goes ahead, many of these competitions have a clause in their rules which say that the organiser will give away a cash prize that's much lower than the value of the property if they fail to sell enough tickets.
In one recent competition to 'Win a family house for a fiver' just £7,000 was given away due to minimal ticket sales.
Personally, I wouldn't want to spend money entering a competition when I have no guarantee that it is going to be run fairly or in accordance with the law.
But there is a way that you can enter home raffles without having to fork out lots of money.
How to enter for free
Many of these prize draws are offering a free entry route in order to keep within gambling law.
It means you should be able to enter for the cost of a stamp by sending in a postcard to the competition address.
In the eyes of the law, a lottery is any prize draw that you pay to enter where the result is based purely on chance.
You can't run a lottery for your own profit, but only to raise money for charity or a good cause and you are likely to need a licence from your local authority or the Gambling Commission to do so.
If it's a small lottery such as a raffle or a tombola at a local fundraising event such as a school fete then you probably wouldn't need permission, but even so it would have to be for a good cause.
What are the other home raffle catches to watch out for?
MANY of the people who choose to raffle off their home may have had difficulties selling it on the open market so it's important to look into the details of the property on offer.
- If your questions about the property on offer aren't answered by the competition's website you should contact the organiser to find out more.
- Check whether the property is freehold or leasehold. If leasehold, check how long is left on the lease and how much it might cost to renew.
- Find out whether there is a service charge, ground rent or other ongoing expenses.
- Some of the most impressive properties like castles and manor houses can have huge running costs that you might not be able to afford.
- Have a look at the selling price of other homes nearby on websites like Zoopla and Rightmove to make sure that the valuation promoted in the competition is realistic.
- Find out whether your legal fees will be covered as part of the prize.
- You shouldn't be required to pay stamp duty if you win as the purchase price of the property is effectively just the cost of an entry ticket or nothing if you used the free route.
What this means is that home owners can't simply sell raffle tickets for their property and then pull a winner out of a hat.
They have two alternatives - one is to run a free draw and the other is to make it a game of skill.
If they choose to run a free draw, the organisers are supposed to make the free entry option just as prominent as the paid route.
Unfortunately, some of the prize draws I've seen bury the free option in the small print, so you might have to look a bit harder to find it.
The other point to watch out for is a clause saying the home owner will only give away the property if the make a certain number of paid ticket sales.
If they fail to meet this number, they may offer a cash prize that's based on the total amount received from paid entries.
Clearly the home owners are worried that they'll be flooded with free entries and end up giving away their property for nothing.
In one recent competition to win a Knightsbridge flat the winner took away a cash prize of £28,000 because of a clause like this.
It's a lot of money, but if you were hoping for a piece of prime central London real estate, you would have been sorely disappointed.
What counts as a game of skill?
Home owners don't have to provide a free entry option if they offer their property through what is known by the gambling watchdog as a "prize competition".
This means they can charge whatever they want for tickets so long as the competition requires an element of skill, knowledge or judgement which would "prevent a significant proportion of people from taking part" or "a significant proportion of people who do take part from receiving a prize".
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What this means in practice is that the question shouldn't be something where you could easily just Google the answer.
So, you might wonder why so many competitions you see on TV and elsewhere have such easy questions.
The reason is that most of these offer a postal entry route so they are actually classed as free draws.
The questions are just included to make it more fun.
So should I enter?
I can't see any harm in entering the free draws, but it's likely that many will give away a much lower cash prize rather than the house itself.
However, spending £25-a-go to enter competitions that you stand a minuscule chance of winning will only push your home ownership dreams further away.
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