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Horse Sales versus Private Treaty Sales

As I have recently seen a significant amount of conversation on social media around auction format “horse sales” versus private treaty sale of horses, I decided to take a minute and compare the two from my view. I may be a little bias as my wife and I own and operate SMB Horse Sales, however I will point out the reason we started SMB was based on bad experience and frustration with trying to find or sell a horse via private treaty. So here are my 2 cents on the pros and cons of each method and why I personally typically preferred “horse sales” even before we started SMB. This is only my opinion and I am sure there are several others

  • Private Treaty

  • Pros for the buyer

  • Price - Likely going to be able to negotiate the price down from what the seller is asking.

  • Testing the horse – Buyers can ride the horse more extensively prior to buying than they would in a “sale” environment – some sellers may even let you take the horse for a trial period.

  • Soundness - Able to arrange Pre-purchase exams to verify soundness.

  • Pros for the seller

  • Environment - Selling the horse in the horse’s comfortable environment – you may have a totally different horse when the buyer gets him home in a new environment

  • Control – the seller can control pretty much everything about the transaction on home turf

  • Dishonesty - If the seller is dishonest they have time to ride the horse down / drug it / or hide something about the horse as the buyer typically must arrange well in advance to look at the horse.

  • Cons for the buyer

  • Dishonest Seller - If the seller is dishonest they have time to ride the horse down / drug it / or hide something about the horse as the buyer typically must arrange well in advance to look at the horse. Reality is there are dishonest people out there trading horses both private party and through sales but I believe it is harder for them to continue through sale venues and sooner or later they develop the reputation in those circles where they can do it much longer on the private scene.

  • Time and Fuel - If the buyer wants to look at multiple horses before deciding they may spend several hours or even days driving around to look at the horses – often finding the horse is not what was advertised.

  • True sense of the horse – The buyer is seeing the horse in it’s comfortable environment – they may have a different horse when they get home.

  • Brand Inspection – Utah law requires a brand inspection as proof of ownership. Registrations papers don’t count as proof of ownership. If the seller never got a brand inspection on the horse, they may have to go back 2-3 owners to get it all straight before the buyer can get a brand inspection proving ownership. This can be a hassle – and the state is now ticketing people for selling horses without brand inspections and the fines are several hundred dollars.

  • Cons for the seller

  • Price – buyers are always going to try to negotiate the price down in a private setting

  • Time – Buyers set up appointments then never show up. Sellers may struggle to be available when a buyer want to look and miss a sale. Ultimately it can be a hassle taking calls / texts from “tire kickers” that are not serious buyers

  • Horse Sales

  • Pros for buyers

  • Brand Inspection / paperwork – companies that operate sales are bonded and licensed through the USDA. They are audited and file reports for every horse going through their sales. They are required to ensure brand inspections and proper paperwork is available and passed on to the buyer. If they do not comply the buyer can file a complaint with the USDA and there a bond backing financial transactions.

  • Performance horses – most reputable sales will hold a preview where you will be able to see rope horses rope / barrel horses run barrels / reining horses run a pattern / etc. Performance horses aren’t cheap so take the chance to see them work

  • Soundness – reputable companies operating sales will not tolerate consignors that bring horses with soundness issues they won’t allow them back. It is also common for veterinarians to be on site checking horses as they are checked in. We always pay a vet to be at our sales and the vet looks at every horse before it gets its hip # - if the horses are drugged or have a major soundness issue the vet will typically be able to tell. Buyers also can arrange for the vet at the sale to do a pre-purchase exam (at buyer’s expense as it would be in a private setting). If not at the sale the buyer can request a pre-purchase exam prior to the sale and most consignors will oblige. For our sale, we also include legal verbiage in the consignment contract that makes the seller legally obligated if they knowingly hide any soundness issue.

  • Variety – without traveling all over, a buyer can see a variety of horses at a sale – typically 30-100 at one location allowing the buyer options and back up options.

  • True feel of the horse – buyers get to see the horse outside the horse’s comfort zone. Sale environments are typically noisy, with a lot of commotion. If a horse is spooky it will show in this environment. At the same time buyers, can almost always contact the seller prior to the sale and arrange to ride the horse prior to sale day. The horse still has to go to the sale but the buyer gets the advantage of seeing the horse in different environments.

  • Pros for sellers

  • Price – the whole purpose of selling a horse at a sale for reputable horseman is the opportunity to have multiple buyers competing for your horse driving the price up rather than individually trying to negotiate the price down. As I have seen mentioned – good horses aren’t cheap and cheap horses aren’t good!! Good horses are likely to sell for more at a sale than they will in a private setting – especially if the seller knows how to show them off!

  • Payment – As mentioned before companies that operate sales are licensed and bonded with very strict requirements on how payments are processed. Sellers don’t have to worry about a check clearing or and internet scam in a sale.

  • Time – rather than spending time waiting on buyers that may not show up a seller can spend their time prepping the horse to be the best possible on sale day.

  • Marketing – If a consignor registers the horse early the company running the sale will market the horse beyond what most private sellers can or have time for. We market horses all over social media / our website / and multiple other sources. We can typically get the horse seen by 10K plus potential buyers in 30 days. We also field questions and filter out “tire kickers” for the seller.

  • Facilities – someone selling a rope horse may not have access to an arena / steers / etc. to show the horse every time a buyer wants to look in a private setting. At a reputable sale, the seller will have access to show the horse appropriately.

  • Cons for the buyers

  • Price – as mentioned before in a sale setting the whole idea is to get multiple buyers competing for the same horse driving the price up. The buyer likely has less risk though based on things I have already mentioned.

  • Dishonest seller – as I mentioned earlier they exist in both settings but it is harder for them to be successful long term in a reputable sale.

  • Cons for the Seller

  • Expense Risk – Sellers have expense invested into putting a horse in the sale. Consignment fees / vet fees for coggins and health certificates (most reputable sales will require) / and no sale fees in a lot of sales if the horse doesn’t sale. A seller may invest $2-300 putting the horse into a sale plus travel and end up taking the horse home.

  • Uneducated buyers – probably the biggest Con for a seller is a buyer at the sale buying a horse that is beyond the buyers riding ability or knowledge and the buyer will try to pin that back on the seller.

So really there are benefits and disadvantages for both methods and in the end both have dishonest people mixed in. The most important thing is to be educated! Know what you are looking for and don’t get swayed by color or what a seller says the horse potential for. Potential has little value if you don’t have the ability and knowledge to help the horse reach that potential!! Take advantage of getting pre-purchase exams especially when spending higher dollar amounts or at least educate yourself on how to check horse’s legs, feet, teeth, and recognize a horse’s temperament (calm / hot / spooky / etc.). Avoid sales where horses are run loose through the sale ring – that typically means the horse is a major project at best!!

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