Our founder and CEO, Alisa Zotimova, was invited to comment for The Times on the growing trend of property raffles and the potential risks they pose under anti-money laundering (AML) regulations. Read her comment and the full article below.
One family’s raffle enabled a dream move to Australia, while other sellers have struggled – is it really the smart way to sell or a high-risk strategy?
When Natalie Rowcroft and her husband, Bradley, resolved to relocate to Brisbane, Australia, with their three children, they decided against putting their five-bedroom home in Salford, Greater Manchester, on the market. Instead they chose to raffle it, charging £2 a ticket.
Pretty much overnight, their lives were transformed, with numerous live Facebook videos turning them into minor celebrities – and helping them to sell 200,000 tickets.
“It was entertainment”
Rowcroft, 38, says of the period in which their novel house-selling method hit the headlines. People “absolutely loved it”. The couple even threw in the family car.
Their experience in 2020, during the homebuying frenzy of the pandemic, was an early – and successful – example of a way of doing a deal that appealed to both sellers, put off by the time it was taking overwhelmed estate agents to get sales over the line, and “buyers” dreaming of striking it lucky.
The desire to win a home for pocket change has since spawned a huge industry. The company Omaze, founded in the US and now based in the UK, buys, builds and gives away properties worth many millions of pounds in its draws, while other platforms like Raffle House and Tramway Path have also grown rapidly.
The Rowcrofts used Raffall, which allows people to raffle their homes themselves, without the property being bought by an intermediary firm such as Omaze first. In May, the owner of a £250,000 cottage near Sligo, on the northwest coast of Ireland, used Raffall to rack up £950,000 in ticket sales.
And yet, for every success story, there are dangers and pitfalls.
‘We put our lives on hold for 45 days’
The Rowcrofts’ raffle was a resounding hit, as they supplemented the publicity from their Raffall advert with a successful Facebook campaign. The proceeds they raised covered their costs to relocate to Brisbane with their mortgage fully paid off, all fees for the purchase (for them and the raffle winner) covered, and £90,000 left over to spend on moving costs, including business-class flights down under.
However, while they achieved their goal, selling in this way was hardly plain sailing.
“We just literally put our lives on hold for 45 days,” Rowcroft says. “It was morning, noon and night … It was really tough – like doing two full-time jobs.
“I was on social media all the time. You just couldn’t switch off because people then thought [the raffle] was a scam if you didn’t answer back.”
Rowcroft says she barely slept during that month and a half, and lost almost two stone in weight.
Now, on the other side of the world she, her husband and their boys, Bradley, 19, Aiden, 17, and Rhys, 12, are “living the dream”. Would she sell this way again, though? “Never in a million years,” Rowcroft replies.
Their experience of cutting out the middleman, avoiding the hassle of estate agents, collapsing chains and a conveyancing system that takes an average 185 days to complete a sale, has spawned many copycats, hoping for a similar result.
Last week it emerged that the hospitality entrepreneur Rachel Hawkins, 40, who was among the supporting cast in the latest series of Clarkson’s Farm, is selling her £2.8 million 4,000 sq ft six-bedroom Cotswolds country home in a raffle for £10 a ticket through Raffle House. The closing date for entrants is June 30.
When it goes wrong: spending a fortune without selling
While the Rowcrofts benefited from the Covid-era property frenzy, others have been left floundering as they try to sell enough tickets to make a raffle worthwhile.
Imelda Collins, who raffled her cottage near Sligo, sold more than 150,000 tickets. However, she had been facing a crushing loss until last month, spending thousands of pounds of her own money on marketing in a desperate bid to boost ticket sales. Over seven months, she had sold only £1,900 worth of tickets. “She was never going to hit her target,” Stelios Kounou, Raffall’s founder and chief executive, says.
However, two days before her raffle closed, she had a remarkable stroke of luck: her efforts were featured in The New York Times, changing her fortunes hugely. “People don’t realise how hard it is to sell that many tickets,” Kounou says of the hundreds of thousands of entrants needed to make a raffle’s price tag (usually £2–£10 a ticket) add up. “The chances of success are really low.”
Kounou explains that, on his platform, sellers set their own ticket prices and minimum sales threshold; if the latter is not met, they can give 50 per cent of the revenue to the competition winner in a cash prize, and keep 40 per cent themselves, with 10 per cent going to Raffall (this sometimes rises to 15 per cent, depending on their subscription plan). Eighteen people have given away their home on Raffall, he says, with 50 staying put after the ticket sales failed to meet expectations.
‘I’m paying an influencer to post about my home’
For many rafflers, starved of the oxygen of publicity, there is a mountain to climb to raise awareness – and failure is far more likely than success.
Jamie (who did not wish to disclose his surname), a 30-year-old accountant, first raffled his three-bedroom home in Sheffield in 2024, seeking to fund a move to the Yorkshire coast.
“I was expecting towards the end of the raffle for it to take off, really. I’d seen previous raffles that had sold all their tickets, so I was under the impression that it would go a similar way. But I guess it’s fairly inconsistent.”
That hasn’t put him and his partner off. Their home is back on Raffall, this time with ticket prices raised to £5 (from £2 last year), with a smaller goal of 98,000 tickets to sell. Between the lower ticket target and Collins’s recent success, “I’m much more hopeful,” he says of their draw, which ends on August 25 (or when the last ticket is sold).
This time, Jamie is trying to boost his home’s social media presence, handling an Instagram account for the raffle, and enlisting an influencer to post about it.
With chances of success so slim, however, the expense and exhaustion rafflers report scarcely seem to justify the end result. A high-profile failure took place in 2019, when the property developers Harry Dee and Jonny Jackson raffled a £2 million South Kensington flat near the Victoria and Albert Museum, which they advertised on their own website, Cadivus (Latin for “windfall”) – but they raised just £227,000, 11 per cent of their target. Instead they held a prize draw in which the winner got £53,500 from the money raised and kept the remaining £173,500, using £120,000 to cover their costs for VAT, marketing and legal bills while the remainder was “reinvested” into a new property raffle business.
How is Omaze different?
The reason why houses tend to sell so well on Omaze, a company which was founded in Los Angeles in 2012 but is now based in Altrincham, Cheshire, are because it operates using a different model.
Rather than people trying to sell homes themselves on the platform, Omaze carefully chooses and buys or builds the houses it wants and then offers them, with money going both to itself and a chosen charity. It has raffled scores of homes in this way including a £4.5 million four-bedroom house in Cornwall last autumn, won by an NHS nurse. And because Omaze is in charge, the entries have often been in the greatest interest. Winners can either keep the homes, rent it out or take a cash prize.
Getting Omaze to buy your home for a raffle is highly unlikely, however, according to Adam Stack of Stack Property Search.
“They tend to select properties that meet their own specific criteria in terms of price – a key factor so that they get the online visit support,” he says.
And yet, although Omaze has a good reputation, some question marks have been raised as to the type of homes it acquires. Vicky Curtis-Cresswell, a former Miss Wales finalist who won a £6 million home in Norfolk in February, in a draw that also raised millions for Comic Relief, has been unable to move in months later after it emerged that an extension, tennis court and swimming pool at the property do not appear to have planning permission. Omaze says it is in talks with the local council to resolve the issue.
Developers raffling homes to create a buzz
Such is the craze for raffling, a growing number of builders are also raffling off one or two homes on their new-build developments in the hope that doing so will help them generate a buzz about the rest of their properties that are for sale on the open market. Unlike private homeowners, these developers have a big enough marketing budget to get the word out.
The developer Brics, for example, raffled a £685,000 house at its development in Bordon, Hampshire, through the raffle company Best of the Best – and threw in a Land Rover Defender too. The company sold a million tickets at 99p each, and the winner of the raffle won the property. Another raffle, of an £800,000 property at a development in Kingswood, Surrey, ended with the winner opting to take the cash alternative of £610,000 instead.
A money-laundering risk?
Of course, many estate agents aren’t fans of the raffling trend, to which you might reply: well, they would say that, wouldn’t they?
“Raffling a golf weekend or a signed football shirt is one thing, but not a house,”
says Marc Schneiderman, a director at Arlington Residential, an estate agency that sells some of northwest London’s most expensive houses.
Alisa Zotimova, the founder of AZ Real Estate in Marylebone, London, claims the process is wide open to dirty money.
“A person buying a stack of tickets online isn’t subject to the same anti-money-laundering checks as a normal purchaser,” she says. “If they used illicit funds, won the house and then sold it after six months, even at a loss, they have effectively ‘cleaned’ the money.”
Read the original article here.
