I have a horse for sale, and I have someone who is interested, but asked if we would consider doing a lease to purchase. Has anyone done this? If so, what does that look like? My DH is an attorney, so a contract would be pretty water-tight, but I’m not exactly sure how people do these. How does this work (if we agree to it)? I can keep him here for the duration if I felt better. It’s a local purchase, but I don’t care for the farm the buyer is considering.
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What is the lessor/buyer thinking? They may think they are entering into contract alike to a contract for deed used in real estate where at the end of the payment period the title is to be transferred into their name without any additional payment,
You may be thinking this is the monthly lease payment, all is mine none goes to offset the agreed upon price of the horse at end of the lease.
A contract that is enforceable has to be agreeable, it can be arranged in most any fashion that all parties believe is fair.
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I did this years ago with the purchase of a horse. Essentially, I had the horse on a free lease, and if I bought the horse within two months, then the price was (IIRC) 10% below the asking price, after 4 months it was 5% below asking, at 6 months it was the asking price. After 7 months, the lease had to either be renegotiated or the horse returned.
I signed a contract to this effect, and was also required to take out insurance on the horse. I paid board for the horse and for routine vet and farrier care. Everything was spelled out in the contract.
The arrangement worked well. I ended up buying the horse within the first two months.
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Yeah, it’s whatever the two parties agree to.
Typically the lease fee(s) count towards the purchase price if the leaser choses to exercise the option of buying the horse. The balance of the purchase price is still due, it’s not a payment plan.
Sometimes they work, IME with the higher dollar horses. Also IME much of the time “buyer” doesn’t have the money to buy it outright now and won’t at the end of the term either.
Get suspicious when the prospective buyer suggests something like this to open negotiations. You need to sell the horse, advertised to sell the horse? Did NOT say for sale, lease or lease option-just said for sale! Sell the horse.
Just in case you really need to sell the horse, you won’t get your price from a leaser anyway. Maybe get 30% as is customary with leases with or without option to purchase.
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I liken it to an extended trial. For me, where finding the right home for the horse is equally or more important than the money, they work out pretty well. I wouldn’t do this on anything longer than 6 months, and even 6 months is pushing it. At the end of the lease they either buy or return the horse, period. Normally the sale price is listed in the contract, so no more negotiation after the term is up.
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Is be sure to have something making them financially responsible if the horse is injured in their care and they decline to purchase after that injury.
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Thanks, all. Yes, we’ll be sure we are covered and the horse is, IF we do this. We haven’t talked to the buyer about it yet, he just sent the inquiry over, and I wanted to get a good idea of what others have done and see if we even will consider this. Just doing a little research. Thanks, again.
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It might not be injured - it might be skinny, brain fried, lame etc. I would make sure the contract covered that. Now if you know the potential buyer this might not be necessary.
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I like lease to purchase for a horse I actually like and that is being sold local. but only if I like the barn they are going to and the coach they will be working with.
I think there are two ways to think of it: a purchase on payments in which case you have to spell out how much of the payments you will return if they decide not to buy, vs a lease to own where after the lease term is over they can either return the horse or pay a buy out amount.
Either option I highly recommend they get the PPE before the contract starts (if they plan to get one) as it can be really complicated if they wait until the horse has been in their care for a few months to do it.
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Just be sure they are not asking for a lease option to get a lower cost with no intention or financial ability to actually buy it. Meaning it will be off the market during that lease with option period and you will need to start all over with your marketing assuming he comes back in marketable condition.
Why don’t they want to buy him outright? Just need him for a season for a kid aging out? Waiting on a windfall ? Or can’t afford to buy?
Skeptical because personally know a few burned bad by buyers calling on a for sale ad, offering a lease with option then using the horse for part of a show season until they ran out of money then defaulting, one had to bail their horse out of months of back board.
If you do it, vet the h*ll out of those people and their trainer.
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The first red flag to me is that you don’t care for the barn where they will be keeping the horse. Whether you are leasing or selling the horse, that would be an important consideration. I would not sell a horse if I knew he was going to a barn that I felt had less than optimal care.
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In addition to the facts of the lease that I already posted about above, I’ll add that the horse’s owner had done similar leases with other horses before, and she was the one to suggest it as an option. She would have been fine taking the horse back at the end of 6 or 7 months–mostly she wanted the horse off her payroll for several months.
She also checked out the place where I’d be boarding the horse before the lease began, and actually stopped in a couple of times after I bought the horse just to make sure things were fine (they were).
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If seller suggests lease or lease option, am less suspicious of buyer/leasers motives then if horse is just advertised for sale and buyer offers a lease or lease option instead of an offer to buy.
Hope you get what I am trying to say,
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I appreciate everyone’s responses. This is a younger person (not a minor, though), and this is not a high-dollar horse (Not that he means any less to me). I would only consider this if the horse stays on my farm. I’m still not sure I’m going to do this, but wanted to hear others’ stories. Thanks.
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As someone who has seen your lovely horses, I’d also make sure you’re comfortable if their trainer comes to your place, if the horse stays with you during the process. I know you will do right by the horse, jingles for a clear decision and happy outcome for all 
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Not a lease to own but when I was younger with less disposable income I had a seller work with me on a horse slightly above my budget. I paid 50% down, the horse stayed at their farm. I paid 25% the second month, the remainder 25% the third month. At that point I took possession and received a bill of sale. We had a contract if I wasn’t able to pay I would forfeit all paid previously.
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That removes about half of my doubts. But only half, not all.
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Yes, this is similar to what I am thinking. Thanks. 
