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Spinoff! Of the horse buying horror story thread

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  • Spinoff! Of the horse buying horror story thread

    A number of readers had a problem with the "Trainer buys horse for $1000 and a week later sells it for $5000" scenario, which, since not the original question, needed it's own thread.

    I was wondering which parameters made it lucky timing vs. unethical.

    $1,000 and a month later it's $6,000?

    $50,000 and a week later it's $250,000?

    Or, is it always okay? (call it a lucky flip)

    What about this:
    Customer A sells horse to Customer B for $x.
    Horse doesn't work for Customer B, and after putting horse up for sale for 3 months with no buyers, Customer A agrees to buy back horse for $1/3x.
    Six months later, with a solid ride, Customer A sells horse to Customer C for $x.
    Feelings? (this is happening right now in my barn)
    When the boogeyman goes to sleep, he checks the closet for George Morris. -mpsbarnmanager

  • #2
    The horse market is a sticky market. There is not perfect information -- and depending on where the buyer/seller stand, that information looks different. That is the economists take.

    Comment


    • #3
      I don't think it's the timeline or the disparity between figures that is the problem, but the people involved.

      I know someone who bought a horse off of a reserve for $99 that ended up being a 1.40+ jumper and selling for 6 figures in less than a year. Pure dumb luck/right place at the right time/inability to notice talent/didn't really care on behalf of the original owner.

      I think when it starts to become unethical is when there is a relationship between the buyer and seller and that relationship is taken advantage of. I'll use 3 situations to explain:

      A: Friend approaches trainer/agent with a horse they need sold. They've been trying unsuccessfully to sell the horse for 15k and would like the trainer to market the horse in exchange for a commission paid to trainer. Trainer thinks they could get more for the horse, raises the price to 25k, finds buyer out of barn willing to pay close to asking price, deal is done, trainer gets commission on both ends. Sweet pay day for the trainer. ETHICAL.

      B: Trainer finds horse in sales ad for 15k. Thinks horse would be a great prospect, pays 12k for horse after negotiation. Puts in a few rides on the horse, realizes it was grossly underpriced by the original seller, markets the horse for 25k instead, gets an out of barn buyer to pay the price. ETHICAL.

      C: Friend approaches trainer/agent with a horse they need sold. They've been trying unsuccessfully to sell the horse for 15k and would like the trainer to market the horse in exchange for a commission paid to trainer. Trainer knows that this horse will work perfectly for a client in barn that is currently shopping. Client has a budget of 25k. Instead of taking horse in to market for friend, trainer "takes the horse off of her friend's hands" for 15k, immediately ups the price to 25k, tells in barn client with 25k budget that this horse just came in and is perfect for the client. Client buys for 25k and gets snowed, trainer makes an extra 10k, friend loses out on 10k. UNETHICAL.

      I know there are so many factors that can change things and there are so many grey areas, but I really think the emphasis is on the relationships between the people involved.
      Last edited by goodlife; Nov. 29, 2012, 01:02 AM.

      Comment


      • #4
        I am not sure where C is unethical. I can see where it could lead to hard feelings, though. The trainer put his money on the line, and bought the horse from original seller for what seller wants.

        I am a dealer. As such, I buy and sell horses all the time. Quite often I have a list of people that I know are looking for x. If I find x, and buy it, I call those people. Sometimes they buy, sometimes they don't. Everyone knows that I am a dealer, and that any horse I am selling is going to be sold to my advantage. I am liscenced in my state as a livestock dealer.

        I am also a trainer. That is, I have students that ride with me, show with me, etc. All students are aware that I am a dealer. Any student buying a horse off of me knows that it will be to my advantage.

        I have a story that is similar to C. I bought a horse this spring. I had a friend of mine, who is another dealer, with me when I paid for and bought the horse. I paid full asking price for the horse, and did not try to negotiate it. I was trailering the horse home, and my friend decided that she wanted the horse. We agreed on a price that was approx. 4 times what I gave for the horse (I owed her some money and she felt this horse was worth enough to cover that, and that amount was four times the purchase price of this horse). I never took the horse home, just dropped it off at her place for this amount. My friend knew what I had paid for the horse, as she was standing there when I handed the cash over. Never bothered her in the least. Now granted, the whole amount of money we are talking about was less than four figures, but still. Was this unethical?

        Comment


        • #5
          I would have way more of a problem with C if it went more like this:

          Friend needs to sell horse, approaches trainer and says "Horse is $15k" and trainer says "I have a buyer who will pay full price." Trainer goes to client and says "I found a horse for $30k, but I talked the owner down to $25k and that is a STEAL. I think you should do it" Trainer gives 'friend' 15k, pockets the rest AND gets a commission on the $25k price.

          Sure the original scenario is kind of icky and not very friend like, but I don't think it's unethical.

          Comment


          • #6
            Originally posted by x View Post
            I have a story that is similar to C. I bought a horse this spring. I had a friend of mine, who is another dealer, with me when I paid for and bought the horse. I paid full asking price for the horse, and did not try to negotiate it. I was trailering the horse home, and my friend decided that she wanted the horse. We agreed on a price that was approx. 4 times what I gave for the horse (I owed her some money and she felt this horse was worth enough to cover that, and that amount was four times the purchase price of this horse). I never took the horse home, just dropped it off at her place for this amount. My friend knew what I had paid for the horse, as she was standing there when I handed the cash over. Never bothered her in the least. Now granted, the whole amount of money we are talking about was less than four figures, but still. Was this unethical?
            Your version of C is not unethical. There was full disclosure. goodlife's version is rather unethical. It happens. But it drives people from the business.
            ::With age comes wisdom. Apparently "wisdom" weighs about 40 pounds.::

            Comment


            • #7
              Don't see what's unethical in A selling horse to B who has it for 3 months and hates it, buying it back for a reduced price after 3 months, fixing whatever was wrong for another 6 months and selling it at the original price????

              If it all happened in 2 weeks then yeah. Here? Nothing wrong with it over almost a year. B is lucky they took the horse back at any price, they sure did not have to after 3 months.

              Gotta watch the barn rumor mills too. Unless one is in the room(s) when the check(s) was/were signed, one does not know how much was involved. Sometimes those in the room(s) share incorrect information for various personal reasons as well. Some to self inflate by quoting more, some to be hateful.
              When opportunity knocks it's wearing overalls and looks like work.

              The horse world. Two people. Three opinions.

              Comment


              • #8
                You know, the individual seller who is having TROUBLE selling the horse on their own go into the sale with a professional willingly. They are asking, say, 15,000 for the horse. They get 15,000 for the horse. They did not ask for 25,000, and regardless, they coudln't even get the 15,000 on their own. So if the professional ups the price, so be it. They are professional. They have costs they incur in their business and must pay for them. They have higher overhead most likely (cost of farm, water, electric, insurance, possible lost income of a paying boarder while sales horse is in the stall, etc.). People come to professionals to look at horses more often than to the single-horse seller. The professional likely cultivated business relationships and will have an easier time selling usually. So, I don't begrude them making a bigger profit.

                The only situation that emotionally I have a hard time with is the buyer who offers to buy a horse from seller at a low price promising to offer a forever home. Sometimes sellers like knowing that their horse will have a great home and they are willing to come down in price. If the buyer has no intention of keeping the horse and end up selling it for a profit, that I have a problem with. Now, that buyer may have come upon hard times, and I can understand that, but that's different. The deceiptful one makes me mad.
                “Be yourself; everyone else is already taken.”
                ¯ Oscar Wilde

                Comment


                • #9
                  sorry for duplicate!
                  Last edited by ParadoxFarm; Nov. 30, 2012, 01:12 PM. Reason: duplicate
                  “Be yourself; everyone else is already taken.”
                  ¯ Oscar Wilde

                  Comment


                  • #10
                    Originally posted by Alterrain View Post
                    What about this:
                    Customer A sells horse to Customer B for $x.
                    Horse doesn't work for Customer B, and after putting horse up for sale for 3 months with no buyers, Customer A agrees to buy back horse for $1/3x.
                    Six months later, with a solid ride, Customer A sells horse to Customer C for $x.
                    Feelings? (this is happening right now in my barn)
                    I see no problem with this, IF:

                    -Customer A didn't have a reasonable expectation that horse would suit Customer B perfectly well.
                    -Customer A disclosed any and all issues/training problems with horse

                    With this bare bones situation, it reads that Customer A sold horse with integrity, bought horse back because she wanted horse to have good home and Customer B a horse that works for her, and then once horse was going well sold (again, with integrity) to new Customer C.
                    Lucy (Precious Star) - 1994 TB mare; happily reunited with her colt Touch the Stars

                    Comment


                    • #11
                      Originally posted by x View Post
                      I am not sure where C is unethical. I can see where it could lead to hard feelings, though.
                      IMO, that makes no sense: You can't be pissed at someone who behaved ethically. That's immaturity.

                      The only thing I think is unethical is not making full disclosure to your buyer. That person gets to protect his interests, you get to protect yours. Everyone knows that going in, right? So as long as the buyer/seller gets a fair shot at protecting his/her respective interests, it's all fair.

                      Great thread. It's really worth figuring out what's fair and when any of us gets reasonably gets to think we were being treated unfairly.
                      The armchair saddler
                      Politically Pro-Cat

                      Comment


                      • #12
                        I don't take issue with high profit margin. If you see a horse that would be a great flip, and the seller accepts your price, I don't see the problem.

                        I do take issue with deception. I don't think the A/B/C scenarios exactly cover that, but if the asking or purchasing prices are misrepresented to the buyer/seller such that trainer(s) can pocket the difference, that is not right. I beleive it is also unethical to misrepresent the horse's soundness/suitability etc.

                        Comment


                        • #13
                          I don't have any problem with the trainer buys the horse for $1,000 and 1 second later sells it for $50,000. As long as no dishonesty is involved. I would have a problem with the flip if the trainer claimed the horse has gained experience, had been in the trainer's program, or was a different horse/different age etc. But just buying something and selling it for more with the item HONESTLY represented? No problem.
                          ~Veronica
                          "The Son Dee Times" "Sustained" "Somerset" "Franklin Square"
                          http://photobucket.com/albums/y192/vxf111/

                          Comment


                          • #14
                            Customer A sells horse to Customer B for $x.
                            Horse doesn't work for Customer B, and after putting horse up for sale for 3 months with no buyers, Customer A agrees to buy back horse for $1/3x.
                            Six months later, with a solid ride, Customer A sells horse to Customer C for $x.
                            I think after customer A putting in solid rides or whatever for the past 6 months, the value of the animal most likely increased, therefore the increased selling price to customer C.

                            The part that needs clarification is customer B. Was customer B desparate to sell the horse back to customer A, thus the decrease in price?
                            I don't always feel up to arguing with your ignorance

                            Comment


                            • #15
                              If the person (dealer, trainer or other) buys a horse and upsells it there may be times when it's not entirely "clean" but at least they took some risk with their own money. The above scenario where the trainer who knows a buyer willing to spend $25k tells them that a $15k horse is a markdown TO that price from $30k is unethical and because they'll also pocket a commission on the $25k potentially illegal.
                              F O.B
                              Resident racing historian ~~~ Re-riders Clique
                              Founder of the Mighty Thoroughbred Clique

                              Comment


                              • #16
                                Originally posted by goodlife View Post
                                C: Friend approaches trainer/agent with a horse they need sold. They've been trying unsuccessfully to sell the horse for 15k and would like the trainer to market the horse in exchange for a commission paid to trainer. Trainer knows that this horse will work perfectly for a client in barn that is currently shopping. Client has a budget of 25k. Instead of taking horse in to market for friend, trainer "takes the horse off of her friend's hands" for 15k, immediately ups the price to 25k, tells in barn client with 25k budget that this horse just came in and is perfect for the client. Client buys for 25k and gets snowed, trainer makes an extra 10k, friend loses out on 10k. UNETHICAL.
                                Originally posted by ParadoxFarm View Post
                                You know, the individual seller who is having TROUBLE selling the horse on their own go into the sale with a professional willingly. They are asking, say, 15,000 for the horse. They get 15,000 for the horse. They did not ask for 25,000, and regardless, they coudln't even get the 15,000 on their own. So if the professional ups the price, so be it. They are professional. They have costs they incur in their business and must pay for them. They have higher overhead most likely (cost of farm, water, electric, insurance, possible lost income of a paying boarder while sales horse is in the stall, etc.).
                                ParadoxFarm, the facts I bolded in the first quote is what makes Scenario C unethical.

                                Your statements regarding the difference between an individual marketing their own horse vs. a professional doing the same are completely true. BUT, when an owner approaches a professional wanting to do consignment business with them, and instead the professional flips the horse themselves, THAT is unethical.
                                ::With age comes wisdom. Apparently "wisdom" weighs about 40 pounds.::

                                Comment


                                • #17
                                  The single biggest issue is lack of transparency, in my view.

                                  There is nothing inherently wrong, for instance, with a trainer selling a horse for $30k and the owner only pocketing $15k. As long as the trainer was forthright with the owner at the outset.

                                  The same goes for the OP's scenario. If the A told B that the horse was ruined, wasn't worth $X even with some training and essentially took advantage of the opportunity, then I think B has reason to be upset. But if A laid out B's options - i.e. put horse in training, take it to certain shows in order to increase value - and B opted to forgo that route...well, then I can't imagine why anyone would be upset with A.

                                  Comment


                                  • #18
                                    Originally posted by ParadoxFarm View Post
                                    You know, the individual seller who is having TROUBLE selling the horse on their own go into the sale with a professional willingly. They are asking, say, 15,000 for the horse. They get 15,000 for the horse. They did not ask for 25,000, and regardless, they coudln't even get the 15,000 on their own. So if the professional ups the price, so be it. They are professional. They have costs they incur in their business and must pay for them. They have higher overhead most likely (cost of farm, water, electric, insurance, possible lost income of a paying boarder while sales horse is in the stall, etc.). People come to professionals to look at horses more often than to the single-horse seller. The professional likely cultivated business relationships and will have an easier time selling usually. So, I don't begrude them making a bigger profit.

                                    The only situation that emotionally I have a hard time with is the buyer who offers to buy a horse from seller at a low price promising to offer a forever home. Sometimes sellers like knowing that their horse will have a great home and they are willing to come down in price. If the buyer has no intention of keeping the horse and end up selling it for a profit, that I have a problem with. Now, that buyer may have come upon hard times, and I can understand that, but that's different. The deceiptful one makes me mad.
                                    If the pro BUYS the horse and flips him to a client, that's one thing. (They have overhead etc) If the struggling seller enters into an agency agreement with the pro, that pro then has a responsibility to act in the best interest of the CLIENT, not himself. Thus, if they can get $25k for that same horse they should and out of that the seller should pay the agreed upon commission.

                                    The scenario above where a pro tells a client a horse is a great buy as he's $25k down from $30k, knowing that the seller is looking for $15k and your second scenario (a forever home) are both cases where transactions are taking place under false circumstances. In both cases a blatant lie was told in order to induce the sale.
                                    F O.B
                                    Resident racing historian ~~~ Re-riders Clique
                                    Founder of the Mighty Thoroughbred Clique

                                    Comment


                                    • #19
                                      Scenario C reminds me of the flipping of antiques that is illegal. A dealer can't buy a lamp for $5 from an old lady, and sell it for its true worth of $50,000 the next week. That's unethical and illegal.

                                      Why is it legal in the horse world? (or IS it?)

                                      Comment


                                      • #20
                                        This is my idea of unethical: Buyer answers add posted by professional trainer for a childrens horse. Buyer comes to see horse. Horse is being groomed by a handler while just standing loose in the isle. Horse greats buyer and looks for treats and is generally very loving. Trainer promotes the horse's sweet nature and perfect temperment for a 9 year old child's perfect mount. Buyer rides the horse and horse is very responsive under saddle. Buyer then purchases horse for a 9 year old child's horse.... Buyer gets horse home only to find out that the horse WILL NOT TIE and throws itself backward violently. Search of previous owner turns up that this is a lifelong problem and the horse is no way suitable for a child because of this problem and has hurt other people when pulling back. Trainer says "sorry horse was sold 'as is'". (Small Claims Court thought differently.)

                                        Comment

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