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Papercheck Essay Contest House

One seemingly unstoppable real estate trend this year has been the write-an-essay-win-a-housecontest, in which homeowners who want to sell their properties in a quicker, more meaningful, or potentially more profitable transaction "gifts" the house to the winning essay writer while recouping costs by amassing entry fees (typically $100 to $200.) As it turns out, this is far from a new scheme. In fact, the folks who offered to give away their historic Maine inn last spring
—a headlining-making event that seemed to have spurred a string of similar contests in recent months—actually acquired the property through an essay contest to begin with, way back in 1993. It's just that the Internet and social media in particular make it easier for these endeavors to go viral and, more importantly, draw enough entries (and accompanying fees) to make it all worthwhile.

As detailed in a new story on The New York Times, however, these contests are not entirely as twee and feel-good as they appear on Facebook feeds. So you want to run or enter a win-a-house essay contest? You'd better read this.

1. First, the math—The Maine inn contest managed to draw over 7,000 entries, which translated into more than $906,000—or just about the property's estimated value. But according to the Times, many similar contests haven't been so successful. Without enough entries to recover costs, owners are often forced to terminate the contests and begin refunding entry fees. Oof.

2. It's not all warm-fuzzies—After the winner of the Maine inn was announced this past June, a Facebook group was created to unite people who thought the contest was rigged. "Fifteen complaints were lodged with the Maine attorney general's office, which led to an inquiry by the State Police," the Timesreports. (The State Police ultimately ruled everything lawful.) And a caveat for any potential contest winners: beware of sore losers. The lucky guy who now runs the Maine inn says losing contestants keep leaving one-star reviews of the place on TripAdvisor and paying him "nasty visits and phones calls."

3. In fact it's more like a part-time job—To avoid the kind of controversy seen in the Maine inn contest, a Virginian couple running a competition for their 35-acre horse farm has gone all out to ensure the process is completely legitimate. These measures include: hiring a trustee to accept entries and remove identifying details, establishing a panel of anonymous judges to make a final decision from 25 finalists chosen by the couple, and setting up a Facebook page that details all the rules for potential contestants. The couple reportedly spendsfour hours a day reading essay entries and explaining rules to possible entrants.

4. Beware, unexpected visitors—A Houston-based realtor who tried a win-a-house essay contest had this to say to the Times: "There were always people walking around and driving by slowly. If someone else does it, I would suggest maybe not living in the place."

5. There's a site for all this—Carolyn Berry, who's behind the Virginia horse farm contest, is chronicling win-a-house contests popping up across the country on this Facebook page; inevitably, she also updates when a contest has been canceled due to insufficient entries.

Do check out the full story on the New York Times.

∙ All House of the Day posts [Curbed]
∙ Write a 200-Word Essay, Win a Historic Inn in Maine [Curbed]
∙ Oh Great, Another of Those Write-an-Essay-to-Win-a-House Contests [Curbed]

Mr. Bares and Ms. Lavorgna are among a small group to try this unconventional sales method. In 2015, for example, an innkeeper in Maine dispensed with her bed-and-breakfast through an essay contest; she had acquired it in the same fashion in 1993. Such contests are uncommon largely because they involve serious legwork, with no guarantee of success. Rather than hammer a “for sale” sign into the lawn and wait for the open house, these sellers have to set up and run a contest, generating enough buzz around a single property to convince thousands of people to gamble on it. Already, Mr. Bares and Ms. Lavorgna have had to extend their deadline, originally set for Jan. 31.

So far, Mr. Bares and Ms. Lavorgna, who live in New Jersey, have spent about $40,000. They hired a lawyer to establish rules and guidelines, judges to read the entries and a publicist to spark interest. They built a website with a promotional video showcasing the property and its surroundings, located in a gated community called the Chapin Estate. They declined to say how many people have submitted essays, as the contest is continuing.

The contest strategy has the potential to appeal to far more potential buyers than might otherwise purchase homes in the area. “I’m absolutely amazed by who enters these contests,” said Sara F. Hawkins, a lawyer in Phoenix, who has handled about five similar competitions, including the one in Bethel. “They’re from all over, all walks of life.”

In the promotional video, set to inspirational music, Mr. Bares and Ms. Lavorgna walk hand-in-hand through the wooded property, roast marshmallows at a campfire and play horseshoes with friends. They have been trying to sell the property because they rarely visit it, which is due in part to the fact that they own two bed-and-breakfasts in Cape May, N.J. The house, just steps from a lake, has a log cabin-y feel, with vaulted ceilings and a stone fireplace.

The video makes it all seem so dreamy. But it also poses the question: If no one was willing to buy the property when it was listed for $825,000 in 2015, why would 5,500 people want to bid on it now?

It all comes down to money, Mr. Bares said.

“I do believe that there are at least 5,500 people who would be willing to pay $149 for a vacation house that’s within two hours of one of the great cities of the world,” he said. “I think that the pool is huge.”

But Christine Vande Vrede, a saleswomen at Chapin Sotheby’s International Realty, with offices in the Chapin Estate, doubts that the pool is so vast. “I don’t see this happening in this neck of the woods,” she said. Unlike internationally famous vacation spots like the Hamptons, people who buy homes in this part of the Catskills “have a regional knowledge,” she said. (Unless, of course, you consider Bethel’s claim to fame, as the actual location of the Woodstock festival in 1969.)

The Chapin Estate has sprawling Adirondack lodge-style homes spread across 20,000 acres of forested land with lakes and mountain views. One listing asks $6.75 million for a 14,400-square-foot compound with two homes, a horse stable and riding arena. A more modest one asks $775,000 for a three-bedroom lodge.

By contrast, Ms. Vande Vrede described 391 Woodstone Trail as “basically a three-car garage with a finished apartment above it.” She added that “what that home has to offer might not be what our clients are looking for.”

Mr. Bares paid around $750,000 for the land in 2007, before he met Ms. Lavorgna. He spent another $350,000 building the home. If the essay contest is successful, it will have raised nearly as much as the 2015 list price of $825,000. “They are trying to short circuit the market,” said Jonathan J. Miller, the president of Miller Samuel Real Estate Appraisers and Consultants, who described the contest as “more of a gimmick than a real contest.”

These types of contests are not without problems. A winner might not comprehend the tax implications, and ultimately be unable to afford the cost of owning and maintaining the property. Contestants who don’t win might challenge the results. There are complicated legal issues associated with holding a national contest, as laws vary from state to state. Without enough contestants, sellers would have to return hundreds, if not thousands, of checks, itself a daunting task.

Mr. Bares and Ms. Lavorgna see the contest as not only a way to sell a difficult property, but also as the start of a business venture. In addition to their two bed-and-breakfasts, they also own an interior design company. They have been featured on HGTV, on Caribbean Life and Flea Market Flip, where they won $5,000.

Using the essay contest as a model, they are designing an internet platform where sellers could list homes for sale by contest. Initial setup plans would cost between $5,000 and $10,000 for access to contest rules, legal plans, promotional materials, social media and a judging platform. Mr. Bares anticipates that the seller would ultimately pay about half the price of a broker’s fee, which is usually about six percent of the selling price.

Their hope rests on the notion that if people can turn their homes into ad hoc bed-and-breakfasts using platforms like Airbnb, what’s stopping them from selling their home in a game of skill? If the entry fee costs about the same as a night on the town, buyers just might take a chance. “Everyone seems to be looking for a deal these days,” Ms. Hawkins, the lawyer, said. “Why not this?”

Continue reading the main story
Correction: February 12, 2017

An article last Sunday about an essay contest to win a house in the Catskills misspelled the given name of the lawyer handling the competition. She is Sara F. Hawkins, not Sarah.

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