When valuing a horse to sell or buy, who hasn't wished for a Blue Book of Horses where you could plug in factors like: age, height, breed, sex, temperament, general health and show record and as an instant result, establish a market value?
In the past, the value of a horse used for work purposes like pulling a carriage or a plow, fell into a range of "the going rate" much like the value of a commercial delivery truck does today.
And while there is a going rate for lower priced horses today, the values of breeding and show stock, depressed far below the levels seen before the recession, are more difficult to determine.
Both seller and buyer are uncertain about trending values. Buyers wonder if they are paying too much in light of the recent price slump and Sellers question if the sale price is too low in a recovering economy where the industry may see a future shortage of quality horses.
Recently, I talked with Susan McCarron, a professional horse appraiser, about horse valuation. She operates McCarron Equine Appraisals http://mccarronequine.com/ and raises Quarter Horses and Paints.
Sue is certified by the American Society of Equine Appraisers http://www.equineappraiser.com and uses a systematic approach to valuing a horse. She evaluates a horse on the following factors:
- Level of Training
- Show Record
- Age and Health
- Breed Type and Characteristics
Contrary to what some of your clients may believe, McCarron lists factors that do not affect value:
- Emotional Attachment
- Perceived Value
- Direct or Indirect Costs of ownership
Much like valuing antiques, art, real estate or classic autos, keeping comparable sales records is essential for arriving at a fair appraisal. And no, Sue doesn't have a secret blue book to help with valuation. She accumulates her sales data base through hard work.
Attending horse auctions in person, or attending online, she keeps sale catalogs in hand and pens in sales data and evaluation factors on each horse as it goes through the sale ring. She admits to liking the process of collecting sale data and maintains keen interest as she watches horse after horse sell.
Witnessing and recording sales data for decades, McCarron confidently arrives at a market value for each client's horses. Travelling mainly in an area including Illinois, Iowa, Indiana, Missouri and Wisconsin she prepares written appraisal reports of market value.
Sue concedes auction prices may tend to be lower in the value range, but they are indicative of the agreed market value between a willing seller and willing buyer at a particular time.
If you haven't already, you may have the need for a certified horse appraiser to help you in your business with a horse donation, resolve a business dispute, establish reality with a naive seller, settle an insurance claim or estate issue or for expert testimony in a court case.
I asked her about current pricing and trends in the industry. She told me cutting horses were strong in value and increasing as well as upper level hunters with proven show records.
McCarron also said roping and rodeo horses, team penning and mounted cowboy shooting horses are popular currently and have good demand.
As far as colors that help sell a horse, Sue said in the western horse world, roans, buckskins and palomino always help a sale. Grays are popular in any discipline for buyers influenced by color as much as performance.
Sue expects prices will push upward eventually for well bred horses in each breed as the number of foals in recent years dropped significantly due to the recession.
In my opinion, an uptick in general values can't come soon enough.
While an increase in horse prices creates a barrier for purchase for some buyers, the current spread between market value and direct costs of raising and training a horse leaves little or no profit for the professional-an unhealthy situation for our industry.