A new Denver-based startup is challenging the traditional path to homeownership with a novel sweepstakes model, allowing people to enter for a chance to win a house for as little as five dollars. The company, FulHouse Inc., aims to address the growing housing affordability crisis by crowdfunding the sale of a home through thousands of small-entry fees.
Co-founder Jason Graf has listed his own two-bedroom Denver townhome as the company's inaugural prize, demonstrating his personal commitment to the concept. This initiative comes as a recent study revealed that more than three-quarters of homes in the United States are financially out of reach for the typical household.
Key Takeaways
- FulHouse Inc. is a new Denver startup using a sweepstakes model for home sales.
- Participants can enter to win a two-bedroom townhome for a $5 fee.
- The model is designed to make homeownership accessible amid a national affordability crisis.
- The first sweepstakes has already raised over $15,000 and will close in late March.
- Some real estate professionals express caution, comparing the model to a lottery and highlighting potential risks.
A New Approach to a Difficult Market
As housing prices continue to climb, aspiring homeowners are often sidelined by steep down payments and competitive bidding wars. FulHouse Inc. co-founders Jason Graf and Sam Cogan saw an opportunity to introduce a different method. Instead of one buyer shouldering the entire cost, their model spreads the price across a large pool of participants.
The goal is for the sum of all entries to equal the home's market value. Once the target is met, a winner is drawn, receiving the property for the price of their entry fee. Graf emphasized that this is not about luxury giveaways often seen on television.
"A lot of those dream giveaways are very fancy mansions, and it's a marketing play for those reality TV shows," Graf explained. "This is something different. This is truly trying to work with our community to give another option."
To launch the platform, Graf listed his own Denver townhome, a move he said was to "put our money where our mouth is." The decision reflects a deep belief in the model's potential to disrupt the conventional real estate market.
Initial Response and Industry Skepticism
Since the first listing went live last month, the concept has gained traction. FulHouse has collected more than $15,000 in entries, indicating public interest in alternative home-buying methods. Graf also reported that real estate agents have already begun reaching out, with one offering to list a portfolio of 20 homes on the platform.
Housing Affordability Crisis
A recent study from personal finance website Bankrate found that over 75% of homes across the U.S. are unaffordable for a median-income household, providing a stark backdrop for innovative models like FulHouse.
However, not everyone in the real estate industry is convinced. Andrew Abrams, a member of the Denver Metro Association of Realtors market trends committee, expressed reservations. He pointed out that the traditional sales process provides sellers with more certainty regarding timelines and financial planning.
"As far as my sellers go, I don't think they'd use this," Abrams commented. "I think they have their expectations for the way to sell a house. It's a little more traditional, and they would stick to that." He compared the model to playing the lottery, cautioning potential participants about the risks involved.
How the Sweepstakes Works
The process is designed to be straightforward for participants, but the underlying mechanics include important consumer protections. The sweepstakes for the Denver townhome is scheduled to conclude at the end of March. If the total entry fees reach the property's sale price by that date, a winner will be selected.
Participant Safeguards
FulHouse has a contingency plan if the financial goal is not met. Entrants will have three options:
- Request a full refund of their entry fee.
- Donate their entry fee.
- Double their entries for a future sweepstakes at no additional cost.
Additionally, the company offers a free entry method; individuals can mail a postcard to participate without a purchase.
Graf acknowledged the initial skepticism that such an offer might attract. "Saying that you can win a house for $5 sounds scammy, right?" he said. "But that's why we're really trying to get the word out that we're just regular people, and we're here to make a difference."
The Broader Implications for Real Estate
While the sweepstakes model is unconventional, it taps into a widespread frustration with the current housing market. For many, the dream of owning a home feels increasingly distant. FulHouse's approach, while not a universal solution, represents a creative attempt to forge a new path.
Real estate experts like Abrams advise thorough due diligence for anyone considering participating. "There's never a reason to say, 'It's different, therefore it has to be bad.' But having said that, doing the full due diligence, doing all the fine reading, all those details are so important," he noted.
The success or failure of this first contest could set a precedent. If the townhome is successfully awarded, it may encourage more sellers and buyers to consider this alternative, potentially creating a new niche in the property market. For now, many in Denver and beyond will be watching to see if a $5 entry can indeed turn into a new set of house keys.
