I’m just curious on how the process works when buying a $20k and up horse. Do buyers pay in cash? Or do they get a personal loan from the bank or something?
I think cash is quite rare because you cannot track cash. A lot of people do checks, money orders, bank transfers, etc.
Whether the owner can outright pay for the horse or needs to take out a loan is completely dependent on finances.
If the seller and buyer don’t know each other, wire transfer is safest for the seller. If they know each other, board together, have the same trainer, personal check can work since they know the horse isn’t disappearing along with a fraudulent money order.
About 15 years ago I did pay with a money order for a horse where I didn’t know the seller. Nowadays money order and cashier check fraud is so prevelant that I would imagine most sellers don’t want to risk it.
I’m guessing most banks would not give a loan secured on the value of the horse. So you’d need an unsecured loan, or loan secured by some other equity, like your house.
I know of one person that took a second mortgage out against her house. I hate debt so saved until I could buy my guy. I did research and knew what he would cost then saved till I had enough to start looking. I catch rode in the meantime and did weekly lessons on a schooler to keep my skills up. When I bought him, I did a wire transfer.
Wire transfer–from Utah to New Zealand!
I used a cashier’s check, as requested by the seller, and mailed it via USPS Priority Mail as that gives you tracking information. If doing a wire transfer, make sure that you have the correct information, including the routing number (which may or may not be the same as the routing number on your checks, if it’s a checking account). My trainer said that she’s been sitting in the bank a few times and then realized that the seller hadn’t given her all of the correct bank information.
I bought one in Germany and did a wire transfer from my bank to the agent’s bank. The sales agent took care of paying the seller and the commissions. I think I wired money to the vet clinic as well. The next one I bought as a foal in Denmark and I had to leave her there for rearing and grading, so I set up a bank account in the breeder’s bank. I could wire money into that account and the breeder could submit a transfer request to me which I would then approve. I only paid them annually, but they sent me quarterly invoices. The purchase price was paid this way, as well as the cost of board, shoeing, vet, etc.
How much does shoeing run over there compared to here, Cowgirl? Just curious. Especially when it’s a young horse without any special needs.
I found bank transfers in europe to be much more readily accepted and easy than they are here. But that was just for normal business dealings. Like that’s how I paid my cleaner even.
**I realize that makes me sound wealthier than I have any hope to be. My husband is military and we lived in Europe for 6 years and cleaners were way cheaper than they are here!
[QUOTE=Velvet;8621041]
How much does shoeing run over there compared to here, Cowgirl? Just curious. Especially when it’s a young horse without any special needs.[/QUOTE]
I don’t know how much it is now. I bought the foal in 2000 and she is 16 now. It was a negligible cost then, like $15 or $20 for a trim; $45 for front aluminum shoes, something like that. However, now Denmark has risen up the ranks in producing top horses and the price of the horses, as well as everything else, has gone way up. I will say, I was surprised how inexpensive it was to board a horse there.
I’ve done personal check, cashier’s check, and wire transfers in the U.S.
If I took out a loan, I’d worry about something happening to the horse before the loan was paid off!
[QUOTE=atlatl;8621320]
If I took out a loan, I’d worry about something happening to the horse before the loan was paid off![/QUOTE]
I suppose thats why some insure their horses.
[QUOTE=Mukluk;8621570]
I suppose thats why some insure their horses.[/QUOTE]
I insure for death and medical. Loss of use insurance is crazy expensive
[QUOTE=Cowgirl;8621318]
I don’t know how much it is now. I bought the foal in 2000 and she is 16 now. It was a negligible cost then, like $15 or $20 for a trim; $45 for front aluminum shoes, something like that. However, now Denmark has risen up the ranks in producing top horses and the price of the horses, as well as everything else, has gone way up. I will say, I was surprised how inexpensive it was to board a horse there.[/QUOTE]
Yeah, I know that Holland is pretty high priced these days. I was wondering about farrier costs in Germany compared to Holland. 
[QUOTE=Velvet;8621954]
Yeah, I know that Holland is pretty high priced these days. I was wondering about farrier costs in Germany compared to Holland. :)[/QUOTE]
I’d be curious to know as well.
What I can say is that back in the '90s it was really hard to find a decent farrier in Germany… even in the super-horsey north. The barn where I rode used to pay extra to bring in a guy from Holland.
I wonder if the quality of work has gone up since then, regardless of price.
[QUOTE=mackandblues;8620046]
I’m just curious on how the process works when buying a $20k and up horse. Do buyers pay in cash? Or do they get a personal loan from the bank or something?[/QUOTE]
I read the OP not as how do you transfer the money safely, but more like: how in the world do people find the money to buy these horses?
And the answer, I think, is a mystery
We have a similar mystery locally with real estate. A three bedroom bungalow starter home is now $1.1 million, a two bedroom condo about $500,000. Salary increases have been flat the past decade. Where are all the 20-somethings in entry-level jobs getting the money for the down payment, let alone the mortgage payments? From their parents, re-mortgaging their houses that have quadrupled in value, I think.
Point being you never really know what money someone has access to. Or doesn’t. People that I know have good salaries can be flat broke at the end of the month. People who seem to be living modestly can have windfalls, trust funds, insurance pay-outs, severance packages, inheritances, generous family, a husband with a good job, maybe even savings (though savings are fairly rare these days).
I also wonder how many expensive horses really sell for the advertised value. Most people I know bargain hard and get a lower price, but it is in the interest of both buyer and seller to not spread that news around. So someone can pay $5000 and still say that they have a $20,000 horse.
As far as people in the stratosphere, people who could really go out and pay full price on the horse recommended by their trainer: I don’t actually know many of those in my current circles. One family sells real estate. The other family made their fortune in, yes, grow lights for the hydroponic plant industry. That could include hothouse tomatoes, but really it’s all about marijuana.
That about sums up life here.
[QUOTE=Scribbler;8622280]
I read the OP not as how do you transfer the money safely, but more like: how in the world do people find the money to buy these horses?
And the answer, I think, is a mystery
.[/QUOTE]
Not so mysterious. This sport attracts wealthy people. These are people who pay 120k for a Porsche SUV. They can afford a $150k horse. These are the same people who blew the market out of the water for everyone else.
For the rest of us, well, you buy it as a foal or as an unbroken 3 year old and you roll the dice as to how it is going to be under saddle and to train.
I really doubt that anyone buys a horse for $5000 that was priced at $20,000 unless the horse was seriously over priced or had a soundness issue.
On the other hand, an expensive horse is a matter of perspective and personal wealth. To some people $20,000 is cheap, $200,000 is reasonable and 2 million expensive.
This is timely.
I haven’t bought a horse for more than 10 years and feel completely flat-footed in my search. My problem is all about whether or not I contact the seller in the first place when I know my budget does not match their asking price.
Do you guys have a rule of thumb, for example, where your search would include horses at an additional $5K above your budget? 10K?..$20??? And have you actually contacted a seller knowing your budget is not their asking price?
[QUOTE=GGStables;8625460]
This is timely.
I haven’t bought a horse for more than 10 years and feel completely flat-footed in my search. My problem is all about whether or not I contact the seller in the first place when I know my budget does not match their asking price.
Do you guys have a rule of thumb, for example, where your search would include horses at an additional $5K above your budget? 10K?..$20??? And have you actually contacted a seller knowing your budget is not their asking price?[/QUOTE]
Depends on your budget. If I had 5K to spend I wouldn’t look at 15K horses, but if I had 40k to spend then I would look at horses up to 50k. I am always upfront about my budget.
