|Me and my oldest son in the lake... live the dream with your own lake house!|
Here's the web site for one such contest.
Basically, it is a clever way to try and sell your home for more than the market will bear by spreading the cost to many parties and offering to donate to charity. The "win a house contest" is a creative concept on it's own. The "giving back" and charity angles are a little questionable. There is a minimum on the amount of entries that will trigger the sale and that dollar amount more than covers the "estimated market price" of the house and the donations.
Several states are prohibited by law from participating in the contest... so it appears some governments may have reservations on this type of "contest".