Two years ago, Ray Sinclair and his wife, Sharon, put their
Yachats, Ore., beach house on the market -- just in time for the housing slump.
"Everybody who saw the house loved it, but nobody could afford it," says
Sinclair, who listed the 1,967-square-foot house for $600,000, then dropped the
price to $539,000. Still, the house sat.
Write a memorable 100-word essay, and this beach house in Yachats, Ore., could be yours. Credit: Ray Sinclair
Then, while lying awake one night worrying about the house,
Sinclair got an idea: Why not give it away in an essay contest? If enough
people paid the entry fee, hed earn market value. At that point I decided
anything was better than having the house just sitting there, he says.
To be sure, many sellers are coming to the same realization
these days. With home prices still falling and the supply of houses on the
market still increasing, sellers are looking beyond traditional sales tactics
in an effort to distinguish their homes from a sea of others. Theyre
auctioning off houses to the highest bidders, giving away freebies and offering
Cyberhomes.com asked the experts to weigh in on what methods
work for sellersand whether any of them represent a good deal for buyers.
Essay contests: Roses
are red, your house is blue
Sinclair made sure he did everything by the book. He hired
an attorney, formed a corporation, recruited three independent judges and launched
a website, www.win-this-home.com. Five months and $40,000 later, the contest
commenced on January 2.
Entrants have until the end of April to pay $200 and submit
an essay of 100 words or less about why they should own this house. Ideally,
the Sinclairs will collect 3,000 entries -- enough to cover the value of the house
and the fees associated with the contest. If they dont make that target, the
Sinclairs will refund the prize money, all of which is in escrow.
As of early February, the couple had a little over 360
essays. But Sinclair is hopeful that things will pick up. "We had 40 people
come see the house on Super Bowl Sunday," says Sinclair. "Word is getting out."
Advice to sellers:
The process takes a lot of work, and money, up front with no guaranteed
success. "But I could see people getting into something like this," says Robert
Irwin, author of The Armchair Real Estate
Investor. Just be realistic about your homes appeal. If its a historic
gem, it may inspire essayists. If its a cookie-cutter home in the suburbs, not
so much. (Bottom Line: A lot of work, with uncertain outcome.)
Advice to buyers:
Make sure the owners have set up a legitimate contest. Then, if you can part
with the entry fee and pen an essay for a house you dont need but can afford
to maintain, go for it, says Irwin. Heck, I might send in my own essay.
(Bottom Line: There is a lot of upside here. If you understand all of the caveats, go for it!)