Negotiating purchase price/offer

[Aleuronx]

I searched the archives and it looks like we haven’t discussed this in quite a while. Has the horse sale business rebounded in a way to change tactics? Seller versus buyer market?

I’m looking down the lens of purchasing a new horse and curious as to the current market and people’s experience with making reasonable offers. I’m looking into a completely different price point having purchased my last horse over a decade ago. I will likely be negotiating some versus asking price but what are buyer/sellers finding typical now? I certainly don’t want to insult but also don’t want to lose out on a good horse due to potential price.

Is this done all before PPE or some wiggle room after? Please share!!

[Malda]

Most people I know do it after the PPE, because if something shows up they have bargaining power. But those are usually my friends who show and they’re buying in the low five figure range.

When I’m horse hunting I’m looking in the four figure range, so there really isn’t much wiggle room. The horse market is very strong so most people aren’t willing to budge.

You can always try offering a bit less and see what they say.

[Scribbler]

It’s going to depend a lot on regional prices and market strength, personal circumstances of seller, and whether horse is over priced to begin with.

[Edre]

Agree with the above - market seems to be highly variant based on region and what part of the market you’re looking at. (Breed, training level, age, discipline, price point.) I will say that I think certain parts of the market have horses listed at prices I would consider high, so ample room to consider negotiating.

My recent experience (purchased within the last month, low five figures): Horse’s list price was, imo, super fair so I didn’t feel like low-balling. (People I sourced for suggestions had recommended making a starting offer that was 2/3-3/4 of the asking price, but as the asking price was reasonable, I didn’t go this route.) My initial offer was about 90% of the list price, but I also included that the seller be responsible for the general post-purchase costs (registration/inspection, pre-shipping vetting like the health certificate/vaccines) so I ultimately paid about 85% of what I otherwise would have.

With adult horses, definitely do PPE first (on buyer’s dime). You can use findings on the PPE to negotiate down if things come up, but only within reason: if you’re buying a 15yo made jumper that’s competing at an upper level, some realistic wear on the horse is to be anticipated and you looked at the horse knowing that - so trying to negotiate down for what falls within a reasonable parameter of wear/aging, is a bit of a stretch.

There seems to be an extreme on both ends of the spectrum - the super low prices (“WANT TO SELL IT ASAP”) and the higher prices seem to have more flexibility for negotiation. A friend picked up a school horse a program was looking to sell - they listed at $1k, she countered with a $500 cash offer, and they accepted. Likewise, I had a pretty decent experience in the low-five-figure range with negotiating, but I also didn’t really lowball.

[LuvRedHeads]

One thing you could do when contacting sellers (which worked for a friend of mine) is to ask right up front if the listed price was firm or if there is some wiggle room. This at least wasted no one’s time if the horse was a little above budget. This was during initial discussions, before friend looked at or tried the horse, and definitely before the PPE. It would suck for everyone if it came as a surprise after the fact that the seller was very firm on price and my friend assumed otherwise. I would say that pending results of the PPE could determine how much of the price was negotiable. I would think that other factors could influence the decision of the seller - a quick, uncomplicated sale, the right fit for a quirky horse, the offer of a long-term home, etc.

[Xanthoria]

I tend to think that if the horse’s price is not round, the extra is what the seller is ready to give up. ie a horse listed at $15,500 - you’ll get $500 without a second glance. A horse listed at $33,000 - the $3000 is negotiation padding.

For myself, I’ve always negotiated price before the PPE. I can’t think of any health issue right now that would convince me to buy a horse at a reduced price. So it’s always a deal that I’ll buy if it passes the PPE to my satisfaction - will you accept $x?

And that doesn’t stop you renegotiating after a PPE too, if something comes up you can live with. I’d just be careful how you word negotiations before the PPE then, so they’re not construed a a firm offer to buy at x price.

I do wish we could adopt the habit of agreeing that the buyer pays the PPE if the horse “passes,” and the seller if it “fails”, as at that stage the PPE findings benefit the seller more than anyone in looking for a remedy or different type of home.

After a buyer has had three or so horses fail a PPE they’re out potentially $5k and that’s less $ to spend on a horse, too. At one time I had a budget of $15k and three failed vettings for me meant I ended up, at the time, with a much reduced budget… doesn’t affect the higher price range buyer as much but it’d stop sellers trying to offload unsound horses a bit, one would hope…

[Guilherme]

The asking price for anything is the ASKING price. Unless otherwise stated it’s the solicitation of an offer to purchase.

When shopping ask what the price is so you don’t waste your time and seller’s time by looking at horses that are substantially beyond your means. But if you have a $5000 budget, depending upon your location and discipline and other needs, you might look at double or more in asking price. Some sellers are reasonable but many are not. Many sellers, as often noted here, are only going to sell to a “good home” and they will decide what that is. As buyer that gives you an opening to get a better price with your showing what a GOOD home you would provide.

I would NEVER ask if the price is “firm.” I would assume it is NOT unless otherwise stated (as in “price is firm”) in an ad.

The horse market in most areas is EXTREMELY seasonal. Prices peak the in spring, decline slightly during the summer, and peak again in the fall but not as high as the spring. Then fall steeply in the winter. This is NOT true in every area or discipline or market level, but it’s true for most of the foregoing.

Before the buyer walks out their door to look at a horse they should have already done some research on prices in their area and discipline. The internet has made a basic search REALLY easy. Remember, though, that you are looking at asking prices. There is no source that I’m aware of the collects actual selling data, as some auto sales websites claim they do.

Horse buying and selling is one of the last bastions of old time capitalism. Every horse is worth what the willing, but un-compelled* seller is willing to take from a willing, but un-compelled, buyer. Translating this bit of reality into a sum of dollars is the trick!!!

G.

*“Compulsion” here is a legal necessity to buy or sell, not just “I’ve GOT to have/get rid of this horse.” );

[Scribbler]

Add to that, every horse is individual and so there is no real blue book value. It’s untrammeled capitalism in a market that is not completely transparent, for unique luxury goods. So much more like buying artwork than cars! What is that painting worth? What it sold for!

[IronwoodFarm]

As others have said, information is your friend. The horse market is variable depending on the location, the breed and the discipline. Training adds to the price of a horse, so if you are looking for a well trained horse with a show record or experience, then be prepared that the horse’s price will reflect that training. It cost money to put it there.

The clearer you can be on what kind of horse you want, the better. The more research you can do about what horses are available in your location, the better an idea you will have of what that horse’s fair market value will be. I agree that it is unwise to look at horses priced at $$$$$ if you only can pay $$$$. While there always stories about someone getting a perfectly trained horse for a song, that is uncommon and unlikely to happen to you.

I sell horses from my own program as well as consignments. I sell a particular breed that is not in ready supply and has a demand that is far stronger than the existing supply. I also own my own farm, all the horses are low maintenance, and they all live out 24/7, so keeping a horse on the market is not a big deal for me. Some sellers are very motivated; I’m more take it or leave it. I actually have had owners who consigned absolutely refuse to take a penny less than the asking price. I’m not always that inflexible, but I don’t sell low because I always have another buyer. I’m also not a jerk; I had one buyer trying a horse when I got another call from a second buyer wanting to buy that horse sight unseen for $500 more than the asking price and no PPE. I said no, that she had to wait in line behind the buyer who was trying him (and who did buy him.)

We agree on the price before the PPE. If the buyer does no like the PPE results, then there is no sale. It’s not a negotiating point. I have had one PPE vet say a horse is slightly off on the lunge line and the next week another PPE vet say the horse is quite sound. (The horse has been sound to this day.) In the first buyer’s case, I said that she should talk to the vet but if there was any uncertainty, she should pass on the horse. She did and that was fine with me. As I said, there was a line of buyers for the horse and a vet who was happy with the performance on a lunge line and took x-rays showing the horse had no issues.

As others has pointed out, there are some sales related costs that may be covered by the seller. I always provide the Coggins and will get a health certificate. I will keep the horse on my farm at no charge and coordinate with a shipper. If the buyer is close by, I may be willing to haul the horse there myself at no charge. I do cover the registration transfer fees and make sure registration is transferred. All horses are sold are current on shots, worming, trims and floats. I throw in a new halter and rope. So you might be able to negotiate some extras.

[WildLittleWren]

I always make an offer BEFORE a PPE with the contingency that the horse passes a PPE satisfactory. Of course, I have always been purchasing at a very low price point (as in low 4 figures!). Not sure how different it normally is done in the higher price brackets. However, unless a price says FIRM, I assume it is not. The horse I just purchased was priced so fairly, I simply paid full price, but we are also talking a very low sum of money to start with. Usually, I make a reasonable offer and go from there.

Whenever I have listed a horse for sale, I have always left a little wiggle room, as I feel most buyers like to feel they got a better bargain, even if it’s only a few hundred off my asking price.

[OneTwoMany]

@Guilherme

The asking price for anything is the ASKING price. Unless otherwise stated it’s the solicitation of an offer to purchase.

But if you have a $5000 budget, depending upon your location and discipline and other needs, you might look at double or more in asking price.

Some sellers put a lot of thought into their asking prices with a focus on being fair and not padding their prices. In those cases, the prices are firm. From this seller’s perspective, buyers that are looking at horses that are priced 100% higher than their budget are a huge waste of time for everyone involved. With one caveat; we don’t deal in four figure horses.

I agree with earlier posters. Ask if the price is negotiable. The seller that has padded the price will suggest there is wiggle room. The seller that is firm will tell you so. Save yourself some grief, frustration and embarrassment. Just ask.

As for negotiating before or after a PPE, you can do either. The aggressive buyers do both. But they run the risk of fatiguing the seller with nickles and dimes. Most choose one tact or the other. At the high end, the seller often has radiographs so there are unlikely to be many surprises on the PPE. If there is a surprise, a lease with option to buy can be a good compromise.

[clanter]

@Guilherme

The asking price for anything is the ASKING price. Unless otherwise stated it’s the solicitation of an offer to purchase.

Agree, as we always were looking for a specific horse the price was a consideration for narrowing the choices but not the deciding factor. If the horse met our list of needs and was in the proper asking price range then we bought it. Really never asked for or expected any discount as after looking at several hundred head finding the one that fit the bill was what we were looking for. (one I believe we looked at nearly six hundred head only to buy one that was not on the list of desired attributes…she was bought primarily because of the way she looked at us; and it did not hurt her cause being very pretty)

One horse purchase the only negotiation was how the payment was to be made as she was purchased in December and the sellers wanted the money paid in the next calendar year for tax reasons.

Also the ones we sold the asking price was the price

[Guilherme]

@OneTwoMany

Some sellers put a lot of thought into their asking prices with a focus on being fair and not padding their prices. In those cases, the prices are firm. From this seller’s perspective, buyers that are looking at horses that are priced 100% higher than their budget are a huge waste of time for everyone involved. With one caveat; we don’t deal in four figure horses.

Absolutely concur. I tried to be one of them. But I’ve run into a legion of sellers who did not do this and sometimes there were in the mid five figures area. Just moving up the price scale does not mean more or less thought in asking prices.

Doing some research ahead of time is a way to address this issue but in no way completely resolves it.

I agree with earlier posters. Ask if the price is negotiable. The seller that has padded the price will suggest there is wiggle room. The seller that is firm will tell you so. Save yourself some grief, frustration and embarrassment. Just ask.

In this I disagree. Asking that question would put me off and you’d get the answer of “maybe.” That would likely put you off and now we are BOTH put off. I don’t see how that improves the mutual experience! As soon as someone tells me that a price if FIRM then I’m pretty sure I’m dealing with a difficult seller. Particularly if I look at $1500 horse with a $15,000 price tag!

As for negotiating before or after a PPE, you can do either. The aggressive buyers do both. But they run the risk of fatiguing the seller with nickles and dimes. Most choose one tact or the other. At the high end, the seller often has radiographs so there are unlikely to be many surprises on the PPE. If there is a surprise, a lease with option to buy can be a good compromise.

The PPE is one of those multi-edge swords. Some buyers use them as a lever to re-open negotiations and others use them as a way to see things that are not otherwise plain to them.

With my own stock I took the time to do a “rough and ready” market survey and price accordingly. Assessing value is an exercise in setting a likely range vice a single number. Sophisticated sellers and buyers know this and that’s one reason why “firm” prices suggest to me I’m not dealing with someone knowledgeable.

By the way, the “mirror image” of the “firm” selling price is the buyer who tells you in the first sentence what their maximum budget is. A seller asking that question of me as a buyer would also be a major league put off.

If you want to know the real world value of anything consign it to auction.

G.

[OneTwoMany]

@Guilherme

The PPE is one of those multi-edge swords. Some buyers use them as a lever to re-open negotiations and others use them as a way to see things that are not otherwise plain to them.

With my own stock I took the time to do a “rough and ready” market survey and price accordingly. Assessing value is an exercise in setting a likely range vice a single number. Sophisticated sellers and buyers know this and that’s one reason why “firm” prices suggest to me I’m not dealing with someone knowledgeable.

By the way, the “mirror image” of the “firm” selling price is the buyer who tells you in the first sentence what their maximum budget is. A seller asking that question of me as a buyer would also be a major league put off.

I agree that the process of assessing value generally entails obtaining a range of inputs, but ultimately the seller needs to determine what they are willing to accept in monetary value. The seller can price a horse at X but be willing to accept Y. Or the seller can price the horse at Y and say the price is firm. Two approaches. Neither is wrong. They are just different.

It is not at all unusual for a professional trainer to contact a professional seller and say, “I saw your horse advertised. I have a client that is doing ‘such and such’ divisions. I’m looking for XYZ in a horse. Client’s max budget is $XXX do you have anything suitable?” Happens all the time. Saves everyone a ton of time. In the meantime, the trainer is probably working their network; making dozens of similar inquiries with their other contacts.

If someone asks about a top derby horse or a top green hunter, we don’t hesitate to say “His price is firm,” if that is the truth. No one wants to encourage a buyer to try a horse priced at XXX when the budget only extends to 75% of XXX, for example. That isn’t useful for anyone.

I completely understand that some sellers price horses with padding so they can have wiggle room on a vetting, have room to pay the odd trainer that double dips, offer a discount to get the buyer over the hump, etc. All of those things are very common. But not everyone approaches business that way. Some sellers simply say “This is the price of the horse. It is fair. It is firm. And it is the same price for everyone.”

[cheektwocheek]

Many first question inquiries tend to ask if my price is negotiable? Guess what, I don’t want to start discounting my horse before you’ve even had a set eyes on him. I’ll only start to negotiate if you’ve already had the PPE done. Don’t mind being asked, just don’t expect anything big.

[Guilherme]

@OneTwoMany

Some sellers put a lot of thought into their asking prices with a focus on being fair and not padding their prices. In those cases, the prices are firm. From this seller’s perspective, buyers that are looking at horses that are priced 100% higher than their budget are a huge waste of time for everyone involved. With one caveat; we don’t deal in four figure horses.

Absolutely concur. I tried to be one of them. But I’ve run into a legion of sellers who did not do this and sometimes there were in the mid five figures area. Just moving up the price scale does not mean more or less thought in asking prices.

Doing some research ahead of time is a way to address this issue but in no way completely resolves it.

I agree with earlier posters. Ask if the price is negotiable. The seller that has padded the price will suggest there is wiggle room. The seller that is firm will tell you so. Save yourself some grief, frustration and embarrassment. Just ask.

In this I disagree. Asking that question would put me off and you’d get the answer of “maybe.” That would likely put you off and now we are BOTH put off. I don’t see how that improves the mutual experience! As soon as someone tells me that a price if FIRM then I’m pretty sure I’m dealing with a difficult seller. Particularly if I look at $1500 horse with a $15,000 price tag!

As for negotiating before or after a PPE, you can do either. The aggressive buyers do both. But they run the risk of fatiguing the seller with nickles and dimes. Most choose one tact or the other. At the high end, the seller often has radiographs so there are unlikely to be many surprises on the PPE. If there is a surprise, a lease with option to buy can be a good compromise.

The PPE is one of those multi-edge swords. Some buyers use them as a lever to re-open negotiations and others use them as a way to see things that are not otherwise plain to them.

With my own stock I took the time to do a “rough and ready” market survey and price accordingly. Assessing value is an exercise in setting a likely range vice a single number. Sophisticated sellers and buyers know this and that’s one reason why “firm” prices suggest to me I’m not dealing with someone knowledgeable.

By the way, the “mirror image” of the “firm” selling price is the buyer who tells you in the first sentence what their maximum budget is. A seller asking that question of me as a buyer would also be a major league put off.

If you want to know the real world value of anything consign it to auction.

G.