No-lose situation?

Fancy buying a Grade 2 listed mansion in Greater London, set in 4 acres of land including a lake? I do. However, the £5.25m valuation is a touch more than I can afford, and so it looks like I will be living in Cherry Tree Cottage for some time to come. The reason for asking is that the opportunity to acquire such popped up in my Facebook feed this week. The owners have set a ‘competition’ to sell the asset, with an entry price of £13.50. The clever bit is that there is no obligation to sell unless 600,000 people take part (i.e. equivalent to the entire population of Bristol, which is perhaps why the deadline has been extended). If that target is not reached the prize is substituted for 75% of the total receipts. Whilst the winner will no doubt still be delighted with this outcome, this creates a no-lose situation for the owner. In the seemingly implausible event that all 600,000 tickets are sold, the owner will gross £8.1m, which after costs should still leave them well ahead of valuation. In the event that they are not, then the owner takes 25% of the takings and keeps the house. So everyone wins? No, not really. If say half the target tickets were sold, the losers will have likely misconceived the risk adjusted quantum of the return at the point of purchase. But being just £13.50 out of pocket, they probably won’t be too bothered. There is relevance here to fractional ownership models being promoted in commercial real estate. For mom-and-pop investors laying out a couple of hundred quid to get a share in the next big City tower, they are very unlikely to correctly appraise risk, nor probably be too bothered if the risk doesn’t pay off (a bit like when Mrs P. bought £200 of bitcoin). By opening up ownership to this type of investors, there is potential therefore to drive up valuations, particularly for properties that command a trophy reputation.