Purchasing At Auction
Buying horses through an auction is one of the most popular
avenues of purchasing. It also is one of the most exhilarating aspects
of the horse business. Imagine a horse race where bets are taken up
to the finish line. A fictitious race of that type is similar to an auction
where prospective bidders duel with one another over the horse of
their choice.
Several thousand horses are sold each year through auctions.
Various types of auctions are held, the most popular of which are
yearling sales and mixed stock sales. Yearling sales are exclusively for
horses which are one year of age, while mixed stock sales feature
broodmares and other horses of various ages.
For individuals in the horse industry, particularly persons just
entering the sport, an auction can be the best source from which to
purchase. Normally the choices of horses are plentiful and are available
for a wide range of prices. However, like any business venture, a
sound game plan based on much research and preparation is essential.
Some helpful guidelines are as follows:
Do Your Homework
Begin educating yourself about the horse business. Structured
avenues exist in the industry through which to study husbandry,
nutrition, genetics and breeding management, but the true aspects of
this business are basically self-taught.
Various trade publications will provide you with much of the
information you need to get started.These trade journals publish
upcoming sale dates in their calendar of events.Various sale companies
also advertise their upcoming sales in the publications, describing
the type of sale and posting sale dates.
Check Out The Sale Company
Seek an auction company that holds a valued place in public
trust. Industry advertisers and specialists can guide you to these reputable
companies.
Study The Catalog
The sales catalog is considered the "Bible" for all prospective bidders
attending an auction. Contained in each catalog are the sale
conditions, the legal terms that govern purchases. In addition, a page
is published for each horse offered. This page is much like the provenance
on a painting or a prospectus on a stock offering. It identifies
the animal, the consignor and provides extensive details about the
relatives of each horse offered.
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Seek The Advice Of Experts
Choose an adviser who will focus on the goals you have established
for your horse business. A reputable adviser will help to avoid
costly mistakes that a novice often makes. A veterinarian with knowledge
of the horse business as well as equine medical expertise is an
ideal adviser. Depending on the size of your operation, having a team
of advisers to help properly guide you may be beneficial.
Attend An Auction And Observe
It is essential to get a sense of how the market is behaving.The
auction is in effect the most reliable barometer, charting the highs
and lows of current conditions. Reading the price list will tell you
the final results. However, it will not reflect the competition, interest
and demand for a particular lot.
Get Familiar With Auction Terms And Conditions
The fever of a good auction can bring out the high roller lurking
in all of us.Therefore, it is important to become familiar with the
terms and conditions of an auction prior to bidding.These terms and
conditions dictate the rule "you bid for it, you pay for it." The successful
bid is irrevocable and legally binding. So, if you are the firsttime
buyer whose arm seems to have a mind of its own, your purchases
might be costly ones, if you have not done your homework.
As all successful people in business realize, you must look before you
leap.
Many other shrewd investments have been purchased through
the auction ring. Of course, there have been some lucky buys, but
many of the best have been the result of thorough research and foresight.
The broodmare Harems Choice, with her seven-day-old foal at
side, proved to be an outstanding find for $20,000. Her foal, later
named Royal Quick Dash, went on to win the 1991 All American
Futurity, thus increasing Harems Choice's value considerably.The
1999 three-year-old champion Old Habits was purchased as a yearling
for $18,500 and by the completion of his second year of racing
he had earned more than $672,000.
Tax Tips
The American Horse Council can provide you with tax tips for
horse owners. Contact the AHC for your copy or to purchase a copy
of the Horse Owners and Breeders Tax Handbook.
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