E: 09/04 Win This Luxurious London Townhouse

ivormonee

Bit puzzled by this.

On the Omaze website it states that the value of the house they are giving away in the prize draw is £3,000,000.

However, in the small print it states that:
"It is expected that approximately £500,000 will be raised for the charity which would mean Omaze being paid £125,000."

So, expecting to raise £500,000 but giving away £3,000,000. Forgive me if I'm being thick but can anyone else see the problem or is there a simple explanation?

jobzwo888

Anyone else entered this.
I purchased the £25 lot then £10 for this, the draw is in a few days finally 

One-Eye

ivormonee said:

Bit puzzled by this.

On the Omaze website it states that the value of the house they are giving away in the prize draw is £3,000,000.

However, in the small print it states that:
"It is expected that approximately £500,000 will be raised for the charity which would mean Omaze being paid £125,000."

So, expecting to raise £500,000 but giving away £3,000,000. Forgive me if I'm being thick but can anyone else see the problem or is there a simple explanation?

They are hoping to sell over £4m of entries - £500k for charity, maybe £250k for the weekly/early bird/other prizes, £125k for themselves and £3m or more for the house etc.

tubbyj

One-Eye said:

They are hoping to sell over £4m of entries - £500k for charity, maybe £250k for the weekly/early bird/other prizes, £125k for themselves and £3m or more for the house etc.

Agree in essence profit of 625 expected, 500 to charity 125 to Omaze.
Expenses I imagine are much more, Stamp duty is 258 for a first time buyer or 348 for  a second home. They must have PR costs and advertising in print and TV.  The payment processing on smaller comps I have seen 2.5% mentioned even 1% is 10's of thousands. Then there's admin operational costs.

Raffle House did a breakdown on their target equating to 1.3m for a 750,000 house and where the revenue goes to which gives some insight into the costs invovled. https://help.rafflehouse.com/en/articles/4233916-why-the-ticket-threshold-to-award-the-property-is-set-at-650-000

ivormonee

Putting all this together might roughly look like this:

£

3,000,000 house
  300,000 SDLT
  400,000 marketing
  500,000 charity
  125,000 Omaze
    60,000  costs
   40,000 contingency
equals:
4,425,000 total raised

In order to meet their target I assume they didn't set a deadline for the competition in the beginning and maybe only announced that Friday would be the deadline very recently, once they were confident they'd reached their required level. Otherwise it would be a huge gamble as they would have to give out more than they've received.