Auctions, discount brokers, etc., have all taken a stab at real estate agents and their profession, working to turn them into a commodity or even get them to disappear altogether. Now there may be a new trend taking place, have a contest to sell your home.
That’s right, in Ocala, Florida, there is a woman that decided she wanted to sell her home, valued at around $1.25 million, through a contest. She claims she is having an essay contest because she wants to sell her home to a pet lover, and not just anyone. She has even put up a website devoted to her contest and is working hard to gain publicity for it.
Before you go thinking this is an innovative idea, take a look at some of the details of the contest. Clementina Marie Giovannetti, the property’s owner and author of pet books, has set the contest up so she can’t lose, and in fact, could walk away with thousands of dollars in profit without actually giving up her property. It could also be a marketing ploy as she is gaining free publicity from this contest and using it to promote her new book.
She is charging a $200 entry fee (which she claims is no big deal for people), and requires a minimum of 6,250 entries. Sound suspicious? If you multiply $200 by 6,250 entries you get…drum roll please…$1,250,000. Go figure. It doesn’t mention what she will do with the money if she gets more than 6,250, but I would bet she will pocket it.
What if she doesn’t get 6,250 entries, what happens then?
At her sole discretion, she can extend the contest as long as she wants, if the minimum number of entries has not been achieved. Her other option is to “close the contest” and refund the money, but there will be a processing fee of $20.00 for each entry. That means she can still make thousands on the entrants even if the contest gets closed.
Think about that, if she gets 6,000 entries, she has the option to close the contest and pocket $120,000!!!
What happens to the winner?
Sure they get to move into a million dollar mansion, but remember that there is a drawback to winning contests. Just think of what the taxes will cost the winner and I am guessing no one entering has even thought about that.
Other contests have cash prizes, where Uncle Sam’s cut gets taken out from the winnings. Since this is a home, the winner has got to be capable of paying those taxes or this home could be lost very quickly to a tax lien. One option they may have is to do a cash out refinance once they take ownership, assuming they can qualify for the new jumbo loan.
Will a Contest Become a New Way to Sell Real Estate?
I rather doubt it because of the many drawbacks. Sure, some creative people out there will find a way to do something like this, but beware. I am willing to bet most, if not all, who run contests to sell their home are doing it to make more money than they should through a normal sale, and doing so at the entrant’s expense.