House raffles & competitions - the easy way out?

Recent months have seen a proliferation of win a house raffles and competitions in a number of countries. Although the idea seems intuitive and the prospects, at least in current market conditions, alluring, do house raffles offer an easy way out of the slump in the housing market?

The theory is simple. Many of us are currently strapped for cash and thus few home owners seem to get a decent price for their homes. Enter the win a house raffle or competition, and you can spread the cost over a large number of potential winners. The home owner gets an acceptable price for his property, and entrants get a chance to win a relatively large prize. Everyone is happy!

The argument is alluring and yet it seems, based on so many examples this year in the UK and abroad, that it tends to underestimate the challenges involved in running a win a house competition or raffle successfully.

So what's wrong with house raffles as they are run currently? I cannot claim to be an expert but I have watched quite a number come and go. For me several things stand out as stumbling blocks that people seem to hit.

One lesson that does seem to prevail is that running a win a house competition is running a business. An online business (for most) and perhaps only for a limited amount of time, but nevertheless requires significant preparation.