Certified Equine Appraisals - When You Need One and When You Don't

There is a vast difference between a Certified Equineshould personally inspect and photograph the animal.
Appraisal and an opinion offered by an experiencedValue cannot be established without determining the
trainer or breeder about the value of a horse. When Icondition of the horse on the date of the appraisal.
get a call to appraise a horse I try to determine whatEvery appraisal is tied to a specific date. In the case of
specific problem the client hopes to solve and offera dead horse the appraisal is done to establish the
the best option to meet their need.value of the animal immediately prior to death.
In many cases a certified appraisal is overkill. When anAppraisals are based upon documented transactions
appraisal is required, clients frequently misunderstandof comparable horses in the same way real estate is
how the appraisal process works. Appraisals can bevalued using 'comps.' If you have a three-year-old
quite costly so it is beneficial to horse owners toshow horse with popular bloodlines it is usually easier
understand when an appraisal is the right decision andto find completed sales to use in preparing the
when it is not.appraisal. The more rare or unique the case, the higher
Most appraisals are made of two types of property,the cost will be to research the industry and find the
real and personal. Houses and land are real property.best comps. Another complicating issue of date is that
Anyone who has purchased a home is familiar withof deceased horses. If a horse died two years ago
real estate appraisals. Equines are considered personalthe value must be established using comparables from
property, but the method for appraisal is largely thetwo years ago, not from current market information.
same as that for real property.Understanding the use of comparables is where most
There are a number of types of values thatowners need a little help. All sales used will be for
appraisers use, but the one most applicable to equineshorses that are as similar to the subject as possible
is Fair Market Value. You can't find a duplicate of abut not exactly alike. The appraiser will take the sale
horse at the store and you can't build an exact replicaprice of a comp and adjust the value to reflect the
from scratch. Each horse is as unique as is each piecefacts specific to the horse being valued. If a comp is a
of real estate.six-year old and the subject a four-year old the value
Fair Market Value is not necessarily the same as theof the comp will be adjusted. If the comp has earned
cost of a horse or the price of a horse. The easiest120 show points and the subject 75 points the value
way to define Fair Market Value is the amount that anmust also be adjusted.
educated buyer would accept from an educated sellerThe price a trainer asks for a horse is not a
in the proper marketplace, with neither the buyer norcomparable. The opinion of a successful breeder is not
seller compelled to make a transaction. In other words,a comparable. Whenever possible comps are taken
the deal is at arms length and the terms arefrom sales at recent auctions of similar horses.
acceptable to both sides with nothing hidden under theRemember when I said that Fair Market Value and
table.price are not the same. There has to be a completed
When you need an appraisalsale to have a good comp. When sales are not
Certified Appraisals may be required for documentingavailable the appraiser has to get creative and must
the donation of a horse on your tax return. Appraisalsreally know how to research to find information useful
are sometimes helpful when applying for insuranceto determining value.
when the value of a horse changes over time or forWhen you don't need an appraisal
establishing the value of a breeding stallion's career.When there is no legal action expected the horse
Most frequently, appraisals are used when there is aowner may need only an opinion of value. In many
legal dispute of some kind. When clients have to paycases I have provided a letter stating my opinion of the
an attorney there is a good chance they may alsovalue of the subject based upon a set of facts. Each
need a Certified Equine Appraisal. One such instance isletter also includes the caveat that is only an opinion
establishing the decline in value of a horse due to injuryand not an appraisal.
or illness.If you have a horse for sale and just want to
The appraisal itself is prepared using the samedetermine the most advantageous asking price you
methods and practices as a real estate appraisal.don't need an appraisal. If you want to get an idea of
When done properly the document itself and the workthe value of a horse before initiating legal action an
file are prepared in a manner appropriate for beingopinion may also serve your need.
entered into evidence in court. This is usually news toMost of the cases I've worked on have been either
owners calling for information about obtaining a valuedivorces or involved the death of a horse. I've done
on their horse. The cost of an appraisal can also beway more opinion letters than certified appraisals, and
eye-opening to an owner.rightly so.
Depending on how difficult the case or unique theIf you need to have a certified appraisal prepared take
horse in question, the appraisal may cost anywherecare to retain an appraiser who is able to represent
from hundreds to thousands of dollars. All expensesyou well should the case go before a judge or jury.
are added to the basic fee. Should a courtKeep in mind that the Fair Market Value of a horse
appearance or deposition be requested the bill will goshould have nothing to do with who hires the appraiser;
even higher.it's still the same horse. All horses are not the same
How the process worksand neither are appraisers. If you have questions I
The process begins with an exchange of information.recommend you contact the American Society of
Unless the subject horse is deceased the appraiserEquine Appraisers in Twin Falls, ID.