Dubbed an attractive alternative to the traditional homes sale and buyer process, a number of property raffles emerged last year. However, the Gambling Commission warned some of these may be illegal.
On it’s website, Win Abode made clear it was not organising a lottery.
Tickets for the contest were sold for just a few pounds and entrants were required to answer a skill-based question – there was also a free to enter postal route.
Property sellers can set an amount to achieve through ticket sales, which may have been more than if the property were listed on the open market.
Win Abode said under the model “everybody wins” with the elimination of viewing, property chains and indecisive buyers.
When the agreed sale price is achieved, the site charges a flat fee of 5%, as well as VAT.
If the sale price is not reached, the owner no longer wants to sell, or for any other reason the property is no longer available, a cash prize draw is instead carried out, according to Win Abode’s terms and conditions.
A commission fee of 12.5% plus VAT, is taken from ticket sales, with 10% of the commission fee donated to homelessness charity Centrepoint. The rest forms the cash prize.
Beat high prices
The competition to win a three-bedroom home in Dalston, East London launched last September, with the aim of raising £700,000.
The site sold tickets for just £2, with entrants able to purchase up to 150 tickets for the chance to “beat” high prices of the London housing market for the “price of a coffee”.
The competition was open for 120 days, before closing on Wednesday night.
But on Monday, two days before the end date, entrants were told that it had not sold enough tickets to reach the £700,000 target and cover the value of the property.
Under its terms, the site could keep rolling over until the £700,000 sum was achieved or provide a cash prize to one of the entrants instead.
It decided to offer cash from the tickets – minus the 12.5% commission by the site – as a prize, with the draw taking place on February 28.
In an email to entrants, Win Abode said: “Whilst we have received thousands of entries to the competition we won’t have reached enough to cover the value of the property this week.”
Since listing the Dalston house, Win Abode has not announced any other property raffles, but has run a competition to win diamond jewellery.
Mortgage Solutions has contacted Win Abode for comment.