Have you heard of anyone letting the new owner take possession of the horse before final payment is made? It is risky but if the room is needed and buyers are limited it is tempting. If you know of this being done, can you let me know the particulars of how you protected yourself?
You are right in that it is an extremely risky proposal but there may be several way to protect yourself.
First off, I'm not an attorney so my suggestions are not to be taken for law.
I would have a contract set up by an attorney similar to an installment sales contract which spells out the terms and conditions of the sale - especially as to when the payments are due and the remedy by you if they are not paid within the specified time.
Another way, and one in which I have used, is to have a bill of sale with the terms and conditions on it plus a series of checks dated for the proper amount and the dates they are to be deposited. If a check bounces or is stopped, you have legal rights. (I used to live in PA and if it is still the same, if you bounce a check you can call the Constables and they will call on the person - it is a crime to bounce a check in PA).
In all cases, especially if the horse is registered, I would hold on to the papers until the final payment has cleared the bank. There would also be a stipulation that the horse will not leave the place where it is going without written permission from you. If the horse is going to be sold, you are to be paid in full before.
All bills of sale should state that once the horse leaves your possession, that the horse becomes their responsibility for anything that happens. That they had the right to a vet check and the horse is being sold "as is where is" and no guaranty is made as to it's fitness for any purpose the new owner intends.
People shouldnt finance toys, MY thoughts are if the person can't afford to buy the horse how are they going to afford to take care of it ? You can do a contract but do you really wanna deal with the hassle of collecting or going and repo ing the horse ? Id just tell the person you are not a bank and am not really up on finance, contract and payment laws and procedures. So you are not interested.
I'd suggest they try a bank or credit card company. If they have good credit and income the bank will give them a loan, If they are jacked up the bank wont. Think about it. If a bank, with lawyers, contracts ,collection agencies and repo men on the payroll wont loan them money, why should you ?
I disagree with the comment if they can't afford it they can't afford to keep it. If a family was upgrading because of their child's talent they may be looking to get a horse that is outside of their immediate cash flow. Buyers can be quite capapble of making board payments and afford to buy a $2000 horse but the $4000 horse is out of their league unless they make payments. Having a talented rider on one of your horses goes a long way to future sales as well.
I've not sold any on payments. I'm just not trusting enough. The last one I sold the buyers took out a personal loan to purchase, but she was 15k, most people don't have that laying around. Posted via Mobile Device
I was extremely lucky, when I bought Alto, my stud, I obviously wanted him in time for the breeding season. The seller had a new stud and didn't want the hassle of two boys around during the season, so she sold him to me on payments.
I was amazed that she let me do that, and it was the first time she had sold one on payments and let the horse go before all payments were made. She obviously held onto his papers until I finished paying for him, and his value to me was limited without any papers.
Situations do arise that make taking payments look very appealing. My situation was prompted by a farm being sold that I was leasing. I was forced to bring 5 horses back to the farm that was already at capacity. I am glad your situation worked from both the buyer and seller's perspective.
I made a deal with my bank, they don't sell horses and I don't give credit. I agree about payments, if a buyer has to make payments they can't afford a vet bill or farrier so who suffers? The courts do little to protect the seller, contract or not. It's just not worth the hassle to let the horse go unless paid in full.