“There are days I am still in disbelief that it happened and it actually happened to me. I don’t want to say I believe in miracles, but I always try and give it a go to see what happens. I’m over the moon,” delighted homeowner Imelda Collins told The New York Times this week.
The miracle she had experienced was not, although you might be forgiven for making the assumption in this broken housing market of ours, managing to buy a house, but succeeding in selling one.
Collins’s joy becomes a bit easier to understand when you see the figures involved. A two-bedroom cottage on 1.75 acres in Leitrim which she bought three years ago for €133,000 and spent €147,000 restoring has just grossed her €1.2 million. She did this by selling it in an online raffle hosted by a UK-based company, shifting 206,815 tickets priced at €5.92 a pop.
The €1.2 million doesn’t go straight into her pocket – there were marketing costs of €25,000 along the way, €2,600 in affiliate fees, and she has agreed to pay the winner’s stamp duty and legal fees as part of the prize. Raffall, the lottery agent she chose (there are several based in the UK, where the raffles are classed as “prize competitions”), takes 10 per cent. Then there’s 33 per cent capital gains tax.
She had hoped to net €400,000 after costs on a house she reckons is worth €300,000. Instead, she’ll walk away with over half a million – more than enough to fund her planned move to Italy. Collins is so thrilled by her success, she’s considering abandoning plans to teach English and become a full-time internet marketer.
The winner, Kathleen Spangler, a 29-year-old US marine corps officer, is ecstatic too. Coincidentally, as she told The New York Times, she applied for her Irish citizenship through lineage on her father’s side last year. Raffall must also be chuffed with its 10 per cent. And even the losers are only out by €6 each.
This can be read two ways: as the a heart-warming tale of a clever woman using her entrepreneurial flair and marketing skills to shift a house in Leitrim for four times its value and simultaneously making a young family’s dreams come true. And no one really loses out; at least, not by very much. Or – miserable killjoy that I am, the way I can’t help reading it – as a bleak statement about the housing dystopia we are experiencing.
House raffles are a big, beautiful, awful idea. Their popularity is a grim reflection on a property market in which your best prospect of owning a house may well be to win one in a lottery. In 1984, George Orwell wrote about the lottery run by the Ministry of Plenty as a way of preventing “the proles” from dwelling on the misery of their existence. “It was probable that there were some millions of proles for whom the Lottery was the principal if not the only reason for remaining alive. It was their delight, their folly, their anodyne, their intellectual stimulant.”
If the odds of today’s house lotteries are not as small as in Orwell’s world, where the largest prizes do not exist at all, they’re still less than spectacular. The majority of houses put up for raffle do not meet the minimum threshold of ticket sales. Raffall’s founder and chief executive Stelios Kounou told The New York Times that 18 houses have been sold so far on the platform, while 50 others did not make their target.
House lotteries may feel like a contemporary antidote to a modern affliction, but they are not a new idea – though the last time they got this level of attention might also have been the last time decent housing was this difficult to access in Ireland.
In 1948, a giant house raffle was held in Dublin by the government of the day, when families on the social housing list were offered a chance to win one of between 220 and 250 brand new houses in Ballyfermot, according to historian Cathy Scuffil, who says there were lines of prams up and down Dawson Street. “Every time somebody’s name was called out, a big cheer would go up,” she said.
Occasional “newly wed draws” were held up to the 1970s for recently married couples on the housing list in Dublin. As a means of getting on the housing ladder, it probably beats bidding against wealthy Americans on a cottage in Leitrim.
Today’s house lotteries often inspire scepticism online, though, unlike in Orwell’s dark vision, the prizes are real – a house if enough tickets are sold, a pile of cash if they’re not. That is a fairly big qualifier. If the minimum number of tickets are not sold, the owner can cancel the raffle and keep 40 per cent of the funds and the house, giving 50 per cent of the cash to the winning ticket holder. Or they can give the house away anyway and keep more of the money. In Collins’s case, if she had not met her goal of 150,000 tickets, she planned to give 40 per cent to the winner.
[ Dolores McNamara: Whatever happened to the €115m lotto winner?Opens in new window ]
On Raffall right now, you can buy a ticket for a semi-d in Yorkshire, apparently being raffled for the second time (“after the previous winner received the alternative huge cash prize option”), a villa with a pool in the Algarve or a beachfront villa on the island of Samui. Presumably most sellers are well-meaning people who want to try to pay off their mortgage, but it is not terribly difficult to imagine someone unscrupulous setting a wildly unrealistic ticket sales target – and pocketing 40 per cent of the cash when they don’t make it.
Still, browsing the listings, it’s hard for even this sceptical prole to resist the temptation to splurge €6 on a ticket or two.
