Everyone may want to win a luxury dream home, but once the keys are passed over and reality sets in, most people opt for a for-sale sign over a moving van.
Jean McKay, a nurse in Sudbury, was at work when she learned she had won an Oakville show home through the Princess Margaret Welcome Home Sweepstakes. She pretty much flipped, as would most people if they found out their $100 ticket had landed them a prize valued at more than $3-million.
The 6,500-square-foot house on a leafy street with wide green lawns in tony southeast Oakville was inspired by vacation homes in the Hamptons and came fully furnished, decorated and landscaped, with House & Home magazine founder and publisher Lynda Reeves overseeing every detail.
Whoever wins the Oakville luxury home in this year’s lottery – whose prizes also include a Muskoka cottage, a Toronto condo, a townhouse in Collingwood, several cars, vacations and home electronics – will likely follow in the footsteps of former winners and opt to sell the property.
The dream of owning a multimillion dollar home may be a fantasy many people love to indulge in, but most winners choose otherwise when faced with the practicalities of calling a dream house home.
If this year’s winner does sell, perhaps the most important thing to consider is that winning the house valued at $4.3-million will likely not mean pocketing a cheque for anything near that amount. Over the past four years, houses have sold for much less – sometimes close to half – their estimated value.
It was fun to entertain the fantasy of calling the house home, but McKay and her husband Niel, who is part-owner of a jewellery store, never seriously considered uprooting their lives and moving to Oakville.
“You wouldn’t have a mortgage but you’d have all the other expenses,” says McKay, 52, who won the house in 2010. “We’d both have to find jobs. Our family is here, our friends are here.”
Nor did the McKays want to pay property taxes that at the current rate would run you about $27, 000. They opted to sell the home, becoming millionaires as a result. They are not the only ones.
Christine Lasky, vice-president of strategic initiatives for the Princess Margaret Cancer Foundation, acknowledges that most of the show homes end up for sale, but, she says, “I haven’t seen an unhappy winner.”
Once the title is transferred to the lucky ticket holder, the house and all its furnishings – the Michel Zelnik coffee table in the living room, the distressed dining table that seats eight, the floor lamps from Crate & Barrel – are theirs to do with as they please. The Princess Margaret covers all the land transfer taxes, real estate fees and legal fees. Winners of this year’s show home will receive $25,000 cash to spend at their discretion, whether for moving costs or covering property taxes while the home is for sale.
Through its lotteries, the Princess Margaret has raised $237-million for cancer research since 1966. It is absolutely vital fund-raising, Lasky points out. And homes are a compelling draw for many people, capturing the imagination – and media attention – much more than a cash prize would.
“It’s everybody’s dream. Whether it’s a young family starting out or people new to this country, their dream is to own their own home,” Lasky says.
So far, 227,500 tickets, or 70 per cent of those available, have been sold in this year’s sweepstakes, and approximately 50,000 people are expected to tour the grand prize show home. Some might be ticket holders, others might become ticket holders after visiting, although it’s safe to say most are there to satisfy their curiosity about just what a big-time show home looks like. Promoting the dream of living in a luxury home is key to why the Princess Margaret does not offer a cash option to winners.
“Programs like that have run in other provinces and they were a bust. You don’t get the dream factor and just the imagination that runs wild,” Lasky says.
But don’t let your imagination run too wild, cautions the 2010 winner. With the house valued $3,638,000 in the lottery’s marketing materials, the McKays decided to put it up for sale with an asking price of $2.6-million.
“We thought, wow, a million dollars off, that’s fantastic,” McKay says.
The house stayed on the market for nearly a year, until the McKays, beginning to think they might be “too pie in the sky,” brought in an appraiser, who valued the house at $1.9-million. Shortly afterward, they sold it for $1.87-million.
Other past winners have similarly seen their homes sell for much less than their estimated value. Last year’s Oakville home, valued at $3,999,000, was sold in August for $2,150,000. The 2009 home, valued at $3,560,000, sold the next March for $2-million. The home from fall 2008, valued at $3,035,000, sold shortly afterward for $1,825,000.
“The pricing is basically all the money we have spent building these homes and decorating them and the real estate,” which usually includes the cost of buying an older home and tearing it down, Ms. Lasky says.
Of course, not every former winner believed they would pocket a cheque for the same value estimated by the foundation, which made the process of selling the home significantly easier than it was for the McKays.
“It never occurred to me that the stated value would translate dollar to dollar,” says Elizabeth Brooks, a teacher in Toronto who won the draw in 2008. “This was our philosophy: It cost us $100. If we sold it for $200 we got a 100-per-cent return on our investment.”
Moving into the home would have been “too much of an upheaval for us,” Brooks says, adding, “It’s a beautiful house.” The 5,000-square-foot home featured high ceilings and a basement kitted out with a pool table and home theatre. “My kids, they loved it,” she says. (They kept the pool table and most of the furniture).
The house was listed in January, 2009 – when the market had taken a nosedive. Brooks and her husband set the asking price below that of comparable homes at the time. “We didn’t quibble about a lot of things because it was essentially free,” she says. A buyer was found in just a few weeks. “Who could complain? You buy a ticket because you want to do something good and then you hit the jackpot.”
Former winners who sold may not have got full market value for their houses, but they all stress that winning made them rich and that they have nothing but good things to say about the Princess Margaret.
McKay, her husband and their children are “set for life” because of the win, she says. They live mortgage-free in the same house they bought for $135,000 two decades ago.
“We’re going to renovate when we get around to it,” she says. “The kitchen really needs to be done.”