There are a number of desperate homeowner’s trying to sell their houses in creative ways. I’ve run across a few stories in this vein. Today, I saw this:
New Mexico couple offer home as prize in $100 essay contest
(04-19) 15:45 PDT Santa Fe, N.M. (AP) --
A couple have decided to give away their home to the winner of an essay contest. The catch: It costs $100 to enter, and the home will go only if at least 2,500 people sign up.
The state Gaming Control Board is examining whether Tiffany and Todd Lovell's contest qualifies as a raffle, which would make it illegal under state law, or a game of skill, which is allowed, said Greg Saunders, the board's deputy director.
"We haven't made that determination yet," he said.
The Lovells said the depressed housing market led them to try to move their 1,200-square-foot, three-bedroom, one-bathroom home through the essay contest. They are hoping to get at least 2,500 entries, which would net them $250,000. If they receive fewer than 2,500 entries, they said they would cancel the contest and return the entry fees.
The couple said entries would be judged by "various members of the Los Alamos County community."
My questions when I see things of this nature are:
- How does the county determine the new property tax if you aren’t buying for value?
- Does the winner know that they will owe federal and state taxes for this capital gain or do they think they are getting the house for $100? If they have to sell the house to pay taxes, are they just the unfortunate ones now holding the hot potato?
- If there is something wrong with the house, is this then a case of fraud, product liability, etc.? Are these owners just opening themselves up for greater liability?
- What happens if the state changes its mind after the transfer and invalidates the contest (assuming they allow it)?
- If this works and becomes popular, how do you regulate it so that it doesn’t become just a con? How is this controlled if the entries are coming in from out of state?
- Who determines if the prize was given away? Or given away fairly?