TWO YEARS INTO DEVELOPMENT OF THE SANCTUARY, A 727-acre, 774-unit master planned community near Orlando, Fla., and 67 homes away from completion, developer Crosswinds Communities had an enviable problem: a lead list of about 2,000 people. To take advantage of the still-high demand but also cover anticipated materials and labor cost increases over another year of construction, Crosswinds employed a lottery.

In a direct mail piece to the entire lead list, as well as a newspaper ad, the developer enticed 76 prospects to each make $10,000 deposits within a month's time to guarantee a spot in the drawing. The lottery event yielded 40 purchase agreements, totaling $17 million in revenue, while another 27 buyers not able to attend closed within two weeks, banking another $9.6 million. Cross-winds structured the lottery so that lot prices increased $2,000 every fifth ticket (by the end, the last lot carried a $17,000 premium), but both the builder and buyers realized the bargain. “If they'd had to wait [up to nine months] to buy, the premium would have been more than $17,000,” says Cathy Doig, marketing director for Crosswinds Communities.

It was also a smart way for buyers to gain instant equity with the appreciation that homes in the same zip code (an estimated 43 percent boost in a two-year period) have experienced without making mortgage payments for a year or more. Meanwhile, Cross-winds was able to negotiate reliable materials and labor deals by ensuring 67 starts in the nine months following the lottery.

CAMPAIGN DETAILS Program: Lottery for The Sanctuary, Oviedo, Fla.; Developer: Crosswinds Communities, Novi, Mich.; Cost: $24,000 (direct mail); $10,000 (event)

Learn more about markets featured in this article: Orlando, FL.