Sunday, April 26, 2015

Value: How much is a horse really worth? The ranting mother is horse shopping...for herself this time!

I wrote this post last night and already I have some updates so the grey italic is, I hope, worth reading. Thank you to all the generous people who give me feedback. It is of enormous value and greatly appreciated!

So some big news here . . . today my husband looked me in the eye and agreed to buy a horse for me. FOR ME!!!!!!!! I am extremely excited.

Now for a reality check. In the fall when I wanted to sell our pony, there were so many great horses on the market which meant we had to be realistic about his price. The fall is a buyer's market. Spring is a seller's market. Right now there is nothing out there, nada, kein.

My husband has given me a tight budget. It should be enough to find something but this may take awhile and compromises will be made. I have $10,000 which also needs to cover my set up costs so vet check, travel, tack. I have a saddle which I hope will fit my horse. If not I may be in deep trouble. So I feel like I can spend $8,000 on my horse. Of course in the fall I could have done it but now it looks like I need at least $15,000 to get into the market. I get it. No one wants to buy a horse in the fall and take care of it and cover its costs through the winter so prices go down. I'm just bummed that now that my husband has finally said yes, inventory is low, prices are high and it looks like it will take awhile for me to find a horse.

In a previous life I was a NASDAQ trader. I have bought and sold several homes. I totally get the idea of markets and value and the fact that they fluctuate. What I have a harder time with are the people engaged in the market who do not understand these things.

When we bought our house I had to engage with such a person. She found our first offer offensive and rudely blew us off. Fortunately my agent was quite savvy, gave her a verbal lashing and eventually got us our house.

Today I sent a very nice email to a seller. She has a lovely horse listed for $17,500.  The horse had gone Novice but not more. My daughter really liked the look of the horse and said that was the one I should be buying so I thought I may as well send an email. What did I have to lose? I was honest about my budget but also about the quality of home I will provide, the fact that I intend to be a forever home, I offered references and hoped for the best. The response was not what I had hoped. The seller could have responded that they appreciated my interest and offered to check in with the owner. She could have said they would keep my information in case anything changed. She could have thanked me for my honesty since I could have wasted her time going to look at the horse before breaking the news of my low budget. Instead, she said my budget is not an acceptable offer on a horse of this caliber. She did wish me luck.

Here's my issue: every offer should be considered. I'm the buyer, the one with the money. I'm a catch for any seller because I actually intend to buy a horse. At some point this seller may be in a real bind and my offer will begin to look spectacular. In the world I live in, BN/Novice horses do not cost nearly $20,000. I know my budget is a bit low but not THAT low. I hope the owner has done some research and made sure she is comfortable with the price she has been advised to set. Just like with the housing market, it is often better to set a realistic price and create more interest from multiple buyers than shoot high and end up with no one coming to look. From my research, a solid BN/Novice horse should cost between $10,000 and $15,000 and leaning toward the lower end of the range as they age and have less Novice experience, more BN experience.  I think $10,000 - $12,000 could be the right price and on the right day I might pay that much. Buying is an emotional experience and buyers often pay more than they initially intended. In the case of the horse I inquired about, it has been listed for nearly 2 months in a seller's market so that would imply it is overpriced though with inventory so low, they may get their price and I may be the one who is proven wrong.

I find that people often over value their own assets. Perhaps it is my experience as a trader but I am generally pretty clear that any asset I have is only worth what the buyer in the market today will pay. The woman with the horse she will not sell below $10,000 has a horse currently worth nothing because there is no buyer in the market today offering her money for her horse (well, there may have been but she missed that opportunity). Tomorrow she may have a horse worth much more or much less. It always depends on the buyers in the market. A seller can hold onto an asset or realize its value by selling to the current buyer. Holding on does not mean it is worth any amount the owner claims. It is still only worth the price the market will pay. If you can afford to hold out for your price and that is important, then I guess that is your prerogative. But every month you keep that horse costs you another $1,000.00 or more so think hard before staying stuck on price. When it came time to sell our pony I was pretty realistic. I took a 30% loss. He's for sale again at a higher price and I think his talent warrants that price if a buyer can be found. I will be happy for both sides of the transaction if it should take place.

Sorry for the economics rant. Mostly I'm just bummed my pockets aren't deeper so I can't go try that really cute horse. No matter! There will be others! And those others will not turn up their noses at my lowly budget. My horse will not be fancy but he or she will be loved. My horse will have a good life and he or she is out there waiting for me. I only hope we won't have to wait too long to find one another.

This morning I heard from a friend who has been in the market more recently. She has travelled to Florida, South Carolina and Virginia looking for horses for both herself and her daughter. The horse for her daughter will be similar to what we bought for my daughter and the horse for her will be similar to what I am looking for. She feels that a proven BN horse of ideal age (I'll say 10) costs about $15,000 so I am low in my budget. But if they have schooling show experience rather than recognized, the price is lower. Likewise as they get older. So a 15 yo will certainly be less. We won't talk about the budget for the other kind of horse!

I also heard back from another owner. This one is asking $15,000 for her horse. Her response to me was lovely. Her horse sounds wonderful. I will keep in touch with this seller. Hopefully she will call me if anything changes and I will certainly call her if I find I am able to do a little better.

I would also add that location is a big factor in the horse market just as it is in the housing market. Horses in Canada are much more reasonably priced. There are fewer people up there and the US dollar is very strong. Prices seem to be better in the midwest where more people can keep horses in their backyards. Metropolitan areas such as the one I live in are just more expensive in every single way so I will either have to pay for the convenience of buying a horse nearby or I will have to travel. I'm already booking my flight to Toronto. I'm cheating and using frequent flyer miles. Those were not mentioned in my budget and may just help me stretch it enough to make this work!

Friday, April 10, 2015

Memberships: USEF? USEA? When acronyms appear on your entry forms you need to start joining some organizations!

When my daughter was little and riding at her sweet beginner barn, the trainers took care of all the paperwork required for attending shows.  Since the barn owned all the ponies and only attended schooling shows, the process was relatively straightforward and we simply signed on the dotted line and wrote a check.

When we moved barns and switched to eventing, things got a little more complicated. There was no longer a big group of kids going off to the same shows.  We were still attending schooling shows so that made things easier. But I found myself having to figure out how to fill out the entry forms (don’t laugh, it’s written in a foreign language) and how to read the prize list. By the way there are no prizes listed on most prize lists.

Last year my daughter attended her first USEA (United States Eventing Association) Recognized Horse Trials. That is when things got more complicated.

Every equestrian discipline has a governing body. The FederationEquestre Internationale (FEI) is the governing body of all equestrian sport in the world. The next rung down the ladder here in the US is the United StatesEquestrian Federation (USEF), which governs all equestrian sports in the US. In addition, each discipline has its own organization from the United StatesEventing Association (USEA) to the United States Hunter Jumper Association(USHJA) to the United States Dressage Federation (USDF). I assume western disciplines and the breeds have similar organizations but I’m sticking with what I know.

As you start attending fancier “recognized” horse shows of any variety, pay attention to the prize list (hunter jumper term for list of classes) or omnibus (eventing term for all pertinent information for entering a show). In addition to information regarding competition levels, judges, stabling and times this will provide guidance as to requirements for entry. It may explicitly say what memberships a participant needs to compete or it may point the reader to a rulebook.

In eventing, a rider does not need to join the USEA until the Beginner Novice level. Kids under 18 get a discount so I believe we paid $60.00 for the year. Horses competing at Beginner Novice, Novice and Training level need to be registered with the USEA with restricted status at a minimum. Restricted status is free. They can also be registered with limited status for $40.00 per year, which is important if you want to be considered for year end awards, and will later need to be upgraded to full status if they begin to compete at the Preliminary level. So your basic kid going out Beginner Novice can get away with just paying $60.00 for a USEA membership and nothing more so long as they register their horse.  A lifetime USEA membership costs $1,500.00 and so is a pretty nice gift for a kid who intends to compete for many years to come.

As a beginner eventing parent you won’t need to worry about USEF or FEI memberships. A rider needs a USEF membership to enter a recognized horse trials at the Preliminary level or above. USEF membership costs $55.00 per year, $165.00 for three years or $2,500.00 for a lifetime membership. FEI levels are indicated by the star system. A * is an international Preliminary Level, ** is an international Intermediate Level and *** is an international Advanced Level. Just looking at the entry form for a CIC, which is an international level competition, it does ask for an FEI number for both horse and rider. When you need to join the FEI you’ve entered the big leagues!

If your child is competing at recognized horse trials you can use to register for most events. I find this website to be very confusing. I am in my second season of using it and I can at least do what I need to do and I like being able to pay online but it feels like some sort of exclusive club for people who know what's up and I feel like the kid who showed up uninvited, never really sure if I'm doing the right thing. First, join USEA so you have that number. Then set up an account. I choose to have a signature page and coggins on file with and pay an annual $10.00 fee so that I don't have to keep sending those in separately after paying online. When you select this option a PDF pops up. You print it out and send it in with the pertinent item. I just sent in 3 - one for the coggins, one for the signature page and one for membership cards. In case you haven't done a recognized HT before, the signature page is signed by the rider, the owner of the horse and the trainer. You will need your trainer's USEA and USEF numbers as well. Registering for the individual events still confuses me. You are asked to select a division and there isn't always an appropriate option available. Fortunately, the show secretaries who receive the information and create the division lists know what they are doing and it all seems to work out! And if you screw up, they'll be sure to let you know! Just do what the show secretary says and you'll be all set!

I don’t know much about other memberships but suggest you take a look at the USHJA and USEF websites if you have a child interested in competing in the hunter, jumper or equitation disciplines. The USEF membership application actually has a space for joining the USHJA so I believe you join both if you are interested in the national competitions. I know many kids who dream of going to pony finals or competing for the various medals. USHJA membership pricing is in line with other memberships.

USDF youth memberships are $60.00 per year, so again, in line with other organizations. The dressage discipline also has schooling and recognized shows and as in other disciplines, the membership becomes necessary when a rider competes at the recognized level.

Depending on your discipline and the areas in which you compete, you may need additional memberships. My daughter competes in a dressage schooling series every summer. The membership is $50.00 per year. I know that the New England Dressage Association, which sponsors wonderful recognized shows and clinics, also offers membership. This membership is not required but offers benefits such as discounts at shows and a copy of the omnibus listing for the year.

Personally, I choose to over subscribe to memberships. When my kids were little we belonged to every museum and aquarium in Boston. We made excellent use of those facilities and I still pay for those memberships as my small contribution to maintaining organizations I am grateful to have enjoyed. Similarly, I am happy to contribute to the organizations that make my daughter’s sport possible. Everything else in equestrian sport is absurdly expensive. Memberships seem very reasonable for all they provide. Certainly we pay entry fees as well so it is not as though memberships have to cover the cost of every ribbon, venue, etc. However, providing great shows at great venues is not inexpensive. It is important to support the people who make it all possible.