Installment Sales for Buying and Selling Horses

In a soft market, many horse sellers will exercise creativity and enter into sale agreements that allow the buyer to pay in installments for the horse. Unfortunately, many of those buyers miss payments, perhaps because they have lost their jobs or just overextended themselves buying horses.

Once a buyer stops paying, it is often difficult to complete the transaction, and at the end of the day, the seller might be forced to repossess the horse and/or take the buyer to court to obtain a money judgment. Many times, the horse is now in much worse condition — he’s often thin, lame or ill, and almost always, his training has suffered.

Selling a horse on installments is taking a substantial risk. Consider that if the buyer can’t really afford the purchase price, how will they afford the monthly board and feed bills as well as the emergency vet bills that inevitably arise? However, if you must accept installment payments on a horse sale, here are some tips to protect yourself:

This key step ensures the horse will receive excellent care and, therefore, be easily sellable later if this sale falls through. Not only that, retaining possession of the horse eliminates the need to obtain a court order to repossess the horse if the buyer stops paying.

Retaining the registration papers can be a powerful incentive to complete payment, as the buyer will not be able to breed the horse or show it in breed association shows until the buyer is the registered owner.

We can’t emphasize this step enough, as it helps avoid misunderstandings and provides helpful evidence in your favor if you have to seek legal remedies against the buyer. It’s affordable, too — ELS offers reasonably priced Installment Sale Contracts. We’ve found that offering this low-cost service helps our clients avoid disputes and provides a good basis for any future claims we might handle on their behalf.

Don’t be too nice! The day the buyer’s payment is late, call him and politely inquire about payment. The more time that elapses between the late payment and your phone call, the more likely your buyer will be to continue to skip payments and/or pay late. Not only that, if you contact the buyer immediately, you might find out he has moved or disconnected his telephone, and the sooner you have that information, the easier it will be to track him down.