You are, of course, forgetting about the additional taxes the winner would have to pay — such as any state, local and transfer tax that may also be in play. And then there’s the commission fee you’ll incur if you sell it.

If you decide to keep it, don’t “bank” on the bank viewing the property as worth $2.3 mil. If it were worth that, it would sell. The fact that we’re discussing this raffle means that the fair value is actually a bit less. So now the bank has to figure out that value, compare that against the tax fees (which is what you’ll ask for as a mortgage), and then judge the winner’s ability to pay the mortgage.

Your suggestion of a reverse mortgage is interesting but it still has the topic of fair valuation in play (not to mention the possibility of further price depreciation in the near future). The bank gives the winner a lump sum payment so they can pay the taxes but how do they (the bank) get their money back? The winner doesn’t pay a mortgage note until they die or sell the home. In the meantime, the interest just gets added to the lien on the property. I don’t see the bank jumping all over that if the winner is young and there isn’t a big, BIG cushion between the home value and the capital needed to pay off the taxes.

Darwin, the reference link to the auction is broken.