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August 30, 2011

The Etiquette Of Horse Shopping: Making A Reasonable Offer

In the first three installments of our horse shopping series, we investigated communication, trials and follow-ups. In our fourth and final installment, we delve into the process of negotiating your offer.

We’ve now come to the end of the horse shopping experience: You’ve watched, ridden and examined your potential mount, and it’s finally time to consider your offer.

“[How to price horses] is a golden question, as a horse is worth what someone will pay for it,” said Courtney Cooper, Nottingham, Pa. “I try to base pricing on age, height, experience, potential, work ethic, soundness and rideability.”

Since you’ve now got a clear understanding of the horse’s attributes, soundness and potential, begin by factoring your observations into the equation. Has the vetting raised an issue you’re cautious about? Does the horse’s athleticism seem to match its market value? Are there other buyers interested in the same horse, or are you planning to spend some time calculating your offer and striking a bargain?

Preparing to purchase your next partner can often be emotionally—and financially—overwhelming, so we’ve asked the experts to clarify their stances on negotiability and the bargaining process.

Are Prices Negotiable?

Chances are you’ve already discussed negotiability with the seller or seller’s agent, but double-checking whether a price is firm can save wasted time and effort.

“It’s fair to be upfront like I am and just say the price I want for the horse and that I’m not going to accept an offer,” said Kelli Temple, Round Hill, Va. “I buy horses that I would like to ride myself, so I don’t take offers. What I tell people that I want for the horse is what I want for the horse.”

Though buyer’s agent Diane Crump agrees that many sellers aren’t willing to negotiate, she’s seen an upswing in negotiability in recent years.

“I’d say 50 percent or less are negotiable. It used to be 10 percent or less, but in this market it’s more than that,” said Crump, Linden, Va.

Firm prices may not leave room for negotiation, but they do preclude the hassle of calculating a reduced offer, leaving you to sum up what you can afford—or walk away.

What’s A Reasonable Offer?

On the other hand, certain sellers may be perfectly willing to negotiate.

“For me, there are three prices: the I-don’t-want-to-sell-my-horse price, the realistic price, and the let’s-get-the-horse-gone price,” said Don Stewart, Ocala, Fla. “It depends how I feel about a horse in a given week, but I like to do business. For me, I’d like to get the horse sold.”

So what do sellers mean when they say they’ll consider a “reasonable offer”?

  • “I’d say [a reasonable offer is] between 10 to 20 percent less than the asking price, depending on the horse’s true value,” said Crump.
  • “I think a reasonable offer is within $5,000-10,000 of the price,” said Temple.
  • “Don’t look at horses that cost double what you want to pay,” said Stewart. “A reasonable offer would be 15-20 percent below asking price. I try to meet somewhere in the middle.”
  • “You can always make an offer. However, if the horse is reasonably priced based on the market and performed as expected, it would be unreasonable to offer significantly less than the asking price,” said Cooper.

A consensus on a 10 to 20 percent reduction in price seems to qualify as a “reasonable offer,” assuming that the horse performed as expected and that the pre-purchase exam didn’t reveal any soundness issues.

What’s An Unreasonable Offer?

But too often, as an anecdote from our Chronicle Forums illustrates, buyers make offers that are unrealistically low.

One of our forums users had gone to great lengths to market her West Coast-based filly to a buyer on the East Coast, complying with multiple requests for photos, videos and information.

“[The buyer] indicated that she was very interested, and I provided a list of vets in the area that could do a [pre-purchase exam],” said our forums user, who wished to remain anonymous. “She set up the [exam], the vet called me to confirm the date worked, and late the night before the [exam], she emails and says we haven't yet discussed the price. 

“My horses are very reasonably priced; I'm a smaller breeder just starting to establish myself, so of course prices are negotiable within reason. My horses are nice quality and already priced quite low for their quality. She says she's prepared to offer half of my asking price.

“When I told her I wouldn't sell the filly for that price, she said her trainer had many concerns about the filly. I asked what the concerns were, and she couldn't name a single one. I told her I'd be happy to talk to her trainer, but I wasn't selling the filly for that price.

“I called the vet the next morning; he was supposed to come do the [exam] in an hour, and she hadn't called to cancel. If I'd known in advance that she was only willing to pay half of my asking price, I would have gently let her know my prices are not that negotiable and saved us both a lot of time.

“There needs to be a balance, and if you aren’t prepared to pay anything close to the purchase price, then call and discuss before putting the seller through the ringer.”

DO: Offer a sum reduced 10 to 20 percent off the full asking price on a negotiable offer.

DON’T: Offer half the asking price at the last minute, wasting your own and the seller’s time and effort.

Dream Horse Discovered

It’s important to remember that all pricing is relative. You’ve known the horse’s price from the beginning, so try not to let your negotiations distract from the bigger picture. As another anecdote from our forums indicates, hesitation may leave you out of luck.

“Don't pass up your dream horse,” said Dr. Lori Vogt, Chronicle Forums user and dressage enthusiast. “Have a checklist, and if the horse ticks off all the right boxes, and you love him, buy him and don't dicker too much. The best horse I ever owned was one I found without even looking.

“My coach insisted I go see this horse even though I already had two horses and wasn't shopping. We went to see the horse and within five minutes of watching someone else try him out, I had negotiated a payment deal with the owner at ringside. He was just that gorgeous and a bargain at the price that was asked, even though the price was high for the local market.

“The funny thing was that the lady who was trying him out when I walked up to see him liked him quite a bit but was a far more cautious buyer. She got off the horse and told the dealer she would like him on a month trial, and then they could negotiate price. He smiled politely and said the horse was already sold.”

DO: Quickly prepare an offer for a horse you’re sure about—time is often of the essence.

DON’T: Waste time negotiating while others could be readying an offer superior to yours.

Parting Advice

We’ve now covered the basics of communication, trials, follow-ups and negotiations—a basic guide to etiquette in the horse shopping process.

Some parting advice from our experts?

  • “Buyer, seller, and agent should be open and honest,” said Cooper.
  • “Try to be polite and tip the grooms that are bringing the horses back and forth to you,” said Stewart. “Be very appreciative and send an email or a text and just say something like, ‘I enjoyed looking at horses at your farm.’ ”
  • “Be on time, be respectful of the horse. Make sure that you are appreciative of the time that people spend getting the horse ready and showing it to you, and then touch base to let them know whether or not you’re interested,” said Temple.
  • “Honesty and integrity are necessary on both parts, the buyer and the seller,” said Crump.

Click here for other articles Etiquette Of Horse Shopping series.