Michael Watts, a Houston-based real estate agent, has attached a baffling price tag to his house: $150.
But there’s a catch.
If you want to buy the home, you have to submit an essay describing why you want to live there, and you have to pay him $150 to review it, the Houston Chronicle reports. The $150 price tag is, in essence, an application fee.
If all goes as planned, Watts will sell his home for a pittance to the person he selects out of thousands of applicants.
“It’s unusual, but it’s not a raffle,” Watts told Inman. “We’re going to review all the offers and are not picking the new owner at random.”
The selling strategy isn’t groundbreaking. Plenty of homeowners have tried to offload their homes using “essay contests” with application fees.
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But recent media coverage of Watts and a Maine innkeeper who’s using an essay contest to sell her inn has refocused attention on the strategy, sparking some debate around whether it’s good for sellers, buyers and real estate agents.
The Maine innkeeper currently holding an essay contest actually acquired the inn through a similar contest in 1993.
That inspired other sellers around the country to follow in her footsteps. But most, if not all, of those copycats generally failed to collect more money through application fees than they would have earned by selling the home conventionally, according to an article published in The Baltimore Sun in 1994.
Yet as Brian Rayl pointed out in the Facebook group “Raise the Bar in Real Estate,” that was “long before the term ‘viral’ was ever coined and places like Facebook and Twitter made things much, much easier (and much more cost effective) to advertise.”
Still, raking in more money in application fees than the value of a home is a tall order. And it would only seem to have a chance at working in markets with tight inventory.
Watts would need to collect thousands of application fees to bag $394,000, the market value of his home estimated by the Harris County Appraisal District.
He plans to refund all the offer fees if he chooses not to sell the home to an applicant.
Some real estate agents applauded Watts’ chutzpah on Raise the Bar in Real Estate, but one agent expressed concern that the selling tactic may discourage the use of buyer’s agents.
The strategy could pose legal challenges, others noted. It might also raise fair housing concerns if a seller selected a buyer based on their demographic background.
Watts is no rookie to real estate, though. He’s likely to have thought long and hard about potential pitfalls.
“It is an interesting perspective and it appears that all of the legal angles are covered at first glance (he states that the fee is nonrefundable and that he is a Realtor, etc.),” Rayl said.
Email Teke Wiggin.
What do you do when you’ve decided to sell a huge, historic, or expensive property in a small town, but no one can afford it? One trend that’s gaining popularity is to run an essay contest with an entry fee that will cover your costs. The essay part makes the scheme a competition of skill instead of an out-and-out lottery, which is illegal in some places, and they also ensure that the winner is someone who will likely continue the business (though that’s never a sure thing). Generally, the contests stipulate the minimum number of entries required, which would add up to at least the value of the property; if the minimum isn't reached, then the entry fees are refunded.
The upside to these contests is that the property goes to an individual who might not otherwise be able to own such a property or start a small business, and the seller reaps the value of the property without having to sell to deep-pocket corporations. However, it doesn’t always turn out that way.
1. THE TEMPLE THEATER
In January, the proprietors of the Temple Theater in Houlton, Maine launched an essay contest for ownership of the 98-year-old theater, one of the oldest continuously operating movie theaters in the state.
The contest received entries from nearly every state and at least six countries—but unfortunately, it didn't draw the minimum 3500 entries necessary for a winner to be picked, and all the entry fees were returned to the contestants. But one of the entrants, Charles “Charlie” Fortier, was still interested in buying the theater. A Houlton native and author of six books, Fortier wrote about his history with the theater in his essay, titled "Why I'd Be Perfect to Run the Temple Theater": He'd seen Star Wars at the theater twice the very night it opened and nearly died during a showing of Blazing Saddles when he laughed and choked on candy pom poms. “I know how important the Temple is to the community even with the proliferation of Netflix and Redbox and want to dedicate my sunset years to keeping it going so it can instill the same wonder in others that I felt when I was kid,” Fortier wrote, according to the Bangor Daily News.
By April, the theater was Fortier's, and the Temple Cinema is still open under his management.
2. HUMBLE HEART FARM
Humble Heart Farm via Facebook
Last summer, Paul and Leslie Spell launched an essay contest with a $150 entry fee for their goat farm in Elkhart, Alabama. Humble Heart Farm came with 20 acres, a house, dairy equipment, and nearly 100 goats and sheep. The prize also included $20,000 to help the new owners get their business up and running.
The couple planned to take the funds from the contest and move to Costa Rica, where they intended to help their missionary friends run a goat dairy. "We've had a pretty successful run here and I thought it was time for us to go help someone else," Paul told Alabama Today. "By giving people the opportunity of winning the farm and creamery we will be able to help our missionary friends to become self-sufficient and have enough income for day to day expenses."
The Spells planned to pick a winner on October 15, but as the deadline approached, they announced they did not receive the 2500 entries required. The number of entries was so small that they decided against extending the deadline and refunded the entry fees. “I’d thought for sure this would work,” Paul said. “We didn’t get even close.”
3. MIX CUPCAKERIE AND KITCHEN
MIX Cupcakerie & Kitchen via Facebook
In order to relocate her family to Cape Cod, Carole Kelaher put her business, Mix Cupcakerie and Kitchen in Waitsfield, Vermont, up for a contest in 2015. To enter, would-be bakers had to submit an essay and a cupcake recipe along with a $75 fee. The contest prize didn't include the building (Kelaher rented the storefront), but it did include 80 hours of training with Kelaher and two month’s rent as well as money for utilities, supplies, and payroll for the bakery's two employees.
"I wanted to spread out the pool of perspective owners," Kelaher told Vermont Public Radio. "It's not necessarily about being a buyer. It's more about having the love and the ability to do this job."
Kelaher needed to raise $22,000 to give the bakery away, but it was not to be. Despite a crowdfunding campaign to raise donations in addition to the essay contest, Kelaher only raised about half the needed amount of money. There were only 85 entries in the essay contest, so the fees were returned. But the publicity helped Kelaher to sell the business the old-fashioned way, and a new owner took over in July 2015.
4. CENTER LOVELL INN
When Janice Sage decided to retire a year ago, the proprietor of Center Lovell Inn & Restaurant in Lovell, Maine, decided to launch an essay contest to award the inn to a new owner. (Sage had herself won the inn in an essay contest in 1993.) The contest required an entry fee of $125 and a 200-words-or-less essay.
“There’s a lot of very talented people in the restaurant business who would like to have their own place but can’t afford it,” Sage told the Portland Press Herald. “This is a way for them to have the opportunity to try.” She planned to narrow the entries to 20, then turn them over to two judges, who would pick the winner.
Sage received 7255 entries, slightly short of the 7500 entries she’d hoped for, but announced a winner anyway. The contest was won by Prince Roger Adams and his wife, Rose. The pair, who had restored an old inn in the early years of their marriage, seemed especially suited for the job: Rose was a chef, and Prince had experience marketing and managing an inn. "This contest is fortuitous since we now aspire to finally own a place outright; somewhere to share our love of fine food, great wines and entertaining with others," Adams wrote in his essay. "Undoubtedly our passion, hospitality and commitment is the perfect recipe for a successful marriage to the beautiful Center Lovell Inn and Restaurant."
But the transition wasn't seamless. Other entrants complained that the contest was rigged; their complaints spurred a two-month investigation, which found no improprieties. Adams told The New York Times that other entrants have left bad reviews of the inn at TripAdvisor and have been paying him "nasty visits and phones calls."
5. SUSTAINAFEST TINY HOUSE
SustainaFest via Facebook
SustainaFest is a nonprofit organization that works to raise awareness about social, environmental, and economic issues in the Chesapeake Bay region. In 2015, they held an essay contest to award a 210-square-foot home in Washington, D.C., where housing prices are sky-high. The home was evaluated at $76,000. The contest required a $100 entry fee and an essay of 350 or fewer words that answered the question: “What are your keys to living a sustainable lifestyle, and how would owning the SustainaFest Tiny House help you realize your dream of living that lifestyle?"
The contest was canceled when there weren’t enough entries to cover the costs of constructing the house. But a Texas couple who had submitted three of the entries ended up buying the home for $50,000. “The couple who bought the house decided to downsize and have been living out of an Airstream trailer,” Sustainafest’s Josh Bennett told UrbanTurf. “They started their own business and have decided they need a bit more space so the tiny house will become their primary residence and the trailer will be the business headquarters.”
6. RIVER HOUSE
River House Contest via Facebook
Rhonda Pennington had an idea to find a new owner for her home on the Ohio River in Vevay, Indiana. The 4200-square-foot house has four bedrooms, three full baths, a wrap-around deck, and a view of Kentucky across the river. Since she had no luck selling the home in the conventional manner, Pennington launched an essay contest with a fee of $199. The essays were to be judged by a panel from Hanover College. The contest was announced in August 2015, and the deadline was to be November 30.
But the contest did not get the required 2000 entries. Pennington announced that fact on December 11, when she posted on Facebook that the contest was canceled and entry fees would be refunded. Some entrants were upset over the cancelation, others over the fact that Hanover College pulled out of the contest before the entry deadline with no announcement to the public, and still others were angrily waiting for their refunds, which were not sent out until January 2016. "I'm very disappointed in how this whole thing was handled,” one entrant, Mary DiMarco of Oakland, Maine, told The Indianapolis Star.
The house is still for sale; you can see the listing here.
7. THE HARDWICK GAZETTE
The Hardwick Gazette
Just this month, a new business joined the contest craze. The Hardwick Gazette, a weekly newspaper in Hardwick, Vermont, needs a new owner. The paper has been in business since 1889, and Ross Connelly, the current editor and publisher, is retiring. It could be yours for the price of a $175 entry fee and a 400-word essay "about the entrant’s skills and vision for owning a paid weekly newspaper in the new millennium."
“We want to hear from people who can hold up a mirror in which local citizens can see themselves and gain insights into the lives within their communities,” Connelly says. “We want to hear from people with a passion for local stories that are important, even in the absence of scandal and sensationalism.”
The prize includes the building, office supplies and equipment, furniture, the archives of past editions, and current lists of advertisers, partners, and subscribers. A minimum of 700 entries are needed to complete the contest, but if the maximum of 1889 entries are received, the winner will receivea $5000 cash bonus. You can read more about the contest, including the rules, at the contest's website.