Equine Appraisals - What You Need to Know

Equine Appraisals

What You Need to Know

by Sara Ballinger

Equine appraisers are

personal property appraisers who specialize in valuing a horse’s current worth. Banks, attorneys, nonprofits, accountants, horse owners/trainers, and estate planners, are among those who may use equine appraisal documents. Determining the Fair Market Value of a specific equine can be tricky. No sales regulations exist within the equine industry, and finding sales prices of comparable horses is necessary to comply with the Uniform Standards of Professional Appraisal Practice (USPAP).

Each appraisal is different depending on circumstances and its intended use. It may be needed for litigation, insurance fraud, or even a donation to a non-profit; consequently, required documents will vary. Basic factors to consider when appraising a horse are age, health, pedigree, lameness/ injury history, competition records, training, and any attitude issues. Also included and factored in may be the horse’s purchase price and costs invested in training. If available, I also evaluate the horse overall in person while matching up registration paperwork. When available, competition videos are also reviewed.

How do appraisers determine values on horses? When conducting an equine appraisal, the important factors to focus on may vary. Horses must be appraised as they are current day. Let’s say a top Grand Prix jumper worth $500,000 is being donated to a nonprofit because of its advanced age and inability to be competitive any longer at that higher jumping level. The horse may, however, still be comfortable jumping at a lower three-foot level. The horse would then be evaluated and appraised as the lower three-foot level jumper that he/she is currently. In this particular case, I would include the horse’s Grand Prix record in the appraisal, taking into consideration the level the horse has accomplished; however, his value would be based at the lower threefoot level of jumping, the requirement of his donation. As required by USPAP regulations, comparable sold horses with the attributes closest to those of the subject horse on the day of donation would need to be found. In order to accomplish this, appraisers may need to reach out to breeders, private sales, and auctions. Once comparable horses are found, a grid system is used to determine the subject horse’s value. I assign a sliding scale of numbers to each attribute that I feel is important in each case. Next, a dollar value per point is determined. The sale prices of all comparable horses are added up and the total is divided by their cumulative scores - yielding an average value per point. That number is then multiplied by the points scored by the subject horse. This will then give a rough estimate of the subject horse’s worth. Appraisers may adjust from here to determine the educated estimate of value based on supporting facts.

Another case example would be an insurance claim. A trailer accident resulting in the death of an equine may necessitate an appraisal of the deceased animal. In this case, the date of the loss of the equine would be the effective date of the report; evaluating the horse as it was just before time of death would be necessary. Since the horse is no longer available to be evaluated in person, an appraiser would have to rely on the owner’s records and any competition records in order to value the horse before death to obtain an insurance claim. Even if a horse was insured at a certain price on the effective day of the policy, that doesn’t mean the horse is worth the same price at the time of the accident. An appraisal would help justify the horse’s worth at the time of the accident.

Another scenario may be an uninsured horse involved in a trailer accident that was caused by another driver. The horse would need to be appraised for its worth on the day of the accident for the insurance companies to decide the settlement.

Overall, investigating and determining the key factors of the subject horse’s worth, and finding comparable sold horses which are the most similar to the subject horse are critical in determining a regulated equine appraisal. 

For more information: sebequineappraisals.com