Contest Offering Real Estate as Prize

[ednjudy]

Michigan. I would like to conduct a contest with an entry fee per contestant. The contest is an essay, asking the contestant to answer the question "Why I Need a Home?" The entry fee per essay is $150, with no limit on the number of entries per person. The contest would be conducted over a period of 90 days. The grand, and only prize, is a home. Entry fees received within the 90 day period must total at least the amount defined by a licensed real estate agent as the suggested listing price of the home if it were placed on the open real estate market. The entry fees would be deposited into an escrow account with a local title insurance company, who also holds a warranty deed in escrow for the home. If at the end of 90 days the suggested dollar amount has not been received, and the actual amount received is not sufficient at a lesser amount, there will be an option to extend the contest for one additional 90 day period or to end the contest. If the contest is ended without having received entry fees totalling the suggested listing price or a sufficient lesser amount, the entry fees will be totalled, an escrow fee deducted (if charged by a title company) from the total received, and the remainder of the entry fees received will be distributed to the first, second and third place winning entrants at the rate of 50% to the first place entrant, and 30% to the second place entrant, and 20% to the third place entrant. If the contest is ended upon having received the suggested listing price or a sufficient lesser amount, the winning entrant will be eligible to receive the home through warranty deed. The grantor of the prize would be responsible for payment of transfer taxes and for providing, at the grantor's cost, an owner's policy of title insurance evidencing clear and valid title to the property and reflecting all encumbrances satisfied.

What, if any, are the legal restrictions in the state of Michigan for conducting such a contest?

 

[pojo2]

What, if any, are the legal restrictions in the state of Michigan for conducting such a contest?

Why don't you call the AG (Atty General) office for Mi and ask them? I have a sneaky suspicion some of those "rules" will not cut it!

 

[acmb05]

What, if any, are the legal restrictions in the state of Michigan for conducting such a contest?

Why don't you call the AG (Atty General) office for Mi and ask them? I have a sneaky suspicion some of those "rules" will not cut it!

I have a sneaky suspicion that none of those rules will cover it since what he is planning is against the law in Michigan. I had a friend in Michigan that wanted to do basically the same thing without the second chance drawing and was told it was illegal to operate a lottery.

 

[ednjudy]

Contest Offering Real Property as Prize

Thank you for your feedback. I also sent the same message to the Attorney General to see what I could find out from that office. Do you know why this is considered a "lottery"?

 

[Some Random Guy]

Do you know why this is considered a "lottery"?

Because you are charging money for a chance to win a prize. Geez, buy a dictionary.

 

[pojo2]

Thank you for your feedback. I also sent the same message to the Attorney General to see what I could find out from that office. Do you know why this is considered a "lottery"?

Look if you can't sell your home through the normal avenues then it is overpriced or needs some work in order to make it more appealing.

Don't know where you are located in Mi but it CAN BE, noticed I did not say is, a hard market.

Just a few of the things wrong with your lottery

1. If I enter I want to see a clear winner of that house and not some concocted but if...
2. Your friends could be the recepients of 1st, 2nd, and 3rd prize under the alternative.
3. How do you plan on choosing 1, 2, and 3 since it is not an auction where bids are placed?
4. In 90 days your market can tank and the house be worth several thousands less than you will advertise at the beginning of the 90 day period.
5. Before I close on this pig in a poke I will want to know I am not winning a NIGHTMARE in progress.
and on and on

Now why can't you sell the home? Look into an auction.

Illegal in my neck of the woods too!

 

[ednjudy]

Not a Question of "Not" Being Able to Sell

This question was posed simply as a question that discusses alternatives to going through a selling process, paying large commissions, and especially in a down market. The house is completely fit, beautiful, spacious, on a wonderful piece of property - that is not, however, the point .Again, the question was posed as an "alternative". You know, the fees and charges of a real estate transaction are absurd - and this could be a better way, maybe a less expensive way for a homeowner. But the issues you have identified in your post were good issues to ponder. Thanks again.

 

[pojo2]

You are whistling in the wind when you tell me that an Agent is not worth the fees associated. Sure they might be high if one can not properly negotiate them but I would never undertake buying nor selling without an agent!