“House Lotteries” Aren’t a New Thing in Montana
I see a lot of people talking about this article making the rounds on Facebook now. "Write the best essay and you can buy this $400,000 house for only $199!" I'm not sure why this particular thing is such a big deal right now, because it's nothing new. In fact, above is a video showing the same thing for a house near Thompson Falls six years ago.
A lot of people are getting the wrong idea about what is going on. They assume that some generous homeowner is willing to sell a dream home for $200 based on some heartfelt, thought-provoking essay. Here's how it really works:
1) By making it a "contest," you eliminate chance, which makes this legal. If it were simply a raffle, that would be a lottery and cause legal issues in most places.
2) You can't submit an entry without paying the $199 fee. Your entry fee goes to an escrow account.
3) If they get less than 2,000 entries, the deal is off. Since your entry fee is held in escrow, you can get it back. (2,000 x $199 entry fee = $398,000)
So, at a minimum the seller will get $398,000, which I assume is fair market value for the house. The fact that the story has gone viral could mean the owner will make thousands more than they would by simply selling on the market.
This is old news to some, but if you see one of your friends post a comment about trying to win a house, send them here.