Living The Dream...
Searching for Horse Property, Farms, Ranches and Equestrian Estates
By Claire Panke
Purchasing a horse property isn’t just buying a piece of real estate; it’s investing in way of life.
While some people long for manicured suburban lawns or pine for upscale urban lofts, for the horse enthusiast miles of board fenced paddocks and lighted riding arenas are what make the heart beat faster. Whether the goal is a turn-key training center, a breeding farm or just a few acres for that special pasture ornament, your purchase of a horse property can be the fulfillment of a dream - or the beginning of a nightmare.
Buying an equestrian property can be equal parts daunting and exciting, but, as with any major personal investment, the key to a successful outcome is to be prepared. Before you write an offer on that dream ranch you’ll want to consult with experts and do some basic homework. Now is a wonderful time to purchase real estate: prices have declined in most areas of the US (in some markets quite substantially) while interest rates have remained at an all time low. Armed with knowledge and the guidance of a real estate professional, you can make the right decisions to fulfill your dream...a horse farm of your very own.
First, take a realistic look at your goals and needs:
Having your horses out your back door can be one of the happiest decisions you’ll ever make.
However, consider not only what you can afford, but also how much time you’ll be able to devote to your horse activities once you’re in a horse property. While you may envision yourself the proud owner of acres and acres of rolling green pastures, the reality is that all horse properties entail a certain amount of work. Embracing the equestrian lifestyle means a serious commitment to the health and safety of your equine friends along with a constant cycle of maintenance and upkeep of barns, outbuildings and fences. If your work and family commitments demand much of your time, or you find your financial resources limited, perhaps a small acreage (or “mini-farm”) will be your best option. (And remember that only so many horses can be sustained “per” acre.)
For the professional or serious horse person with specialized needs, investigate whether there are existing facilities in your area which meet your requirements or if building new is the better option. The horse industry is capital intensive - land, barns, fences, arenas etc. represent a large investment.
Assuming that the residence on your prospective horse farm meets your needs, the first and foremost asset in a horse property is its functionality. Existing structures can often be modified or improved to meet specific needs if they are in good condition. Cosmetic changes are relatively inexpensive and make a big difference in a property’s appeal. An architect, contractor or a structural engineer should be consulted for any major additions or alterations. Restored vintage barns can be charming - indeed, many have been successfully renovated for horses and are quite beautiful as well as practical.
However, older barns/outbuildings with deferred maintenance issues or structural defects may be impractical or prohibitively expensive to remodel. Even after improvements are made these structures may still require constant attention. In such cases it’s more cost effective to start fresh. Functional obsolescence, such as a too narrow aisle or poor drainage, can severely limit a building’s usefulness. Consider also the lay of the land and how the improvements are sited upon it. For example, if you need a half mile training track, you’ll also need enough level ground to build one. If you ship commercial, you’ll need ample area around your barns for a semi to drive in and turn around - unless you relish loading horses on the road.
Enlist the help of a pro:
You wouldn’t try to perform surgery on yourself, so why would you spend hundreds of thousands of dollars on an important personal investment without expert advice?
A good real estate agent will not only save you time and money but also a mountain of headaches. Indeed, a knowledgeable, experienced realtor who understands horse farms is your best ally in the search for your equestrian property.
Horse farms are unique - what marketers call a niche market. While there may be many excellent real estate agents in a given area, finding a horse farm is about more than MLS access and handling paperwork. A realtor who speaks “horse” is an invaluable asset - that person will know that single strand barbed wire isn’t suitable horse fencing and that cattle stanchions are not “stalls”.
Your ranch/horse farm specialist will be familiar with local zoning issues that might impact the usage of your prospective purchase and will also know which lenders will finance acreage and farm properties. He or she will have networked with other horse owners and agents and will be aware of suitable equestrian properties that may not yet be on the market - many prime horse farms are sold through word of mouth before ever being listed. The horse savvy realtor will also be a great resource for barn builders, contractors, fencers, painters, vets, farriers, county extension agents, attorneys, surveyors and other professionals you may need to contact before or after the sale.
Your realtor will be representing you as a “buyer agent”, which means that person will be committed to looking out for your best interests alone and getting you the best possible deal on your new horse farm. You won’t pay anything extra for your realtor’s services - the commission will usually be paid to your buyer agent from the seller’s fees on your behalf.
Some areas of the country have real estate firms that specialize in equestrian properties. In other locations there will usually be several realtors with horse farm expertise - ask for referrals from friends and persons who have recently bought or sold horse farms. If you’re relocating through a third party company, be sure to tell your coordinator that you prefer to work with an equine property specialist.
Although I’ve used the terms “agent” and “realtor” interchangeably, there is in fact a difference. All realtors are agents but not all agents are realtors. A realtor is a professional who is a member of the National Association of Realtors and the local Board of Realtors. As such, a realtor pledges to a higher level of ethics and service - always make sure that your buyer agent is a “realtor”, someone committed to the highest standards of practice in his or her profession.
Talk to a lender:
Now that you’ve decided to take the plunge and you’ve found an agent to assist you, the next step is to contact one or more local lenders to determine how much you can borrow. By getting pre-approved for a mortgage you’ll not only have peace of mind but you’ll also be in a stronger bargaining position when you submit a formal offer. Most sellers will request a copy of a pre-approval letter before entering into serious negotiations with a buyer.
The mortgage sector has undergone several adjustments during the recent financial crises. While money is available to qualified buyers, underwriting guidelines and credit requirements have tightened. Small acreages where the improvements (which to your lender usually mean the house and garage) constitute at least 70% of the property value should be relatively easy to finance. However, larger acreages or commercial equestrian facilities can be more of a challenge. Unless the buyer has enough assets to shoulder a sizeable personal loan, most large interstate banks are not interested in loaning money on these types of properties. But there are other resources available - your equine specialist realtor will know local lenders willing finance farms and acreage.
Location, location, location:
It’s an old adage but it’s true - location is key in real estate. It’s the one thing you cannot change about any property - you can remodel, add on to or tear down, but land is where it is forever.
One of the most important aspects of this truism is that real estate is local - that is to say, market conditions affecting your prospective horse property are specific to that small geographic area. Different areas of the country, even different areas within a state or major metropolitan area, will reflect different market conditions.
Newspaper articles and TV broadcasts tend to focus on national trends - syndicated columnists are often fixated on markets on the coasts. There is useful information to be gleaned from the news but be cautious about applying national headlines to local market conditions. Such generalizations can be misleading without expert knowledge about your particular location so it’s wise to look to local statistics to find out the most relevant recent trends to your specific locale.
Just because you read something on web doesn’t make it true - always ask your realtor for latest market data for the areas you’re interested in. Your agent is at ground zero of the housing market and has access to the latest sales information.
Your preferred location is determined by many factors - proximity to your commute to work, highway access, quality of schools, access to trails and parks, affordability, and for commercial farms, proximity to services and customers. Zoning restrictions in certain locations may restrict usage or building options. Water, utilities, local special assessments, tax rates etc will also have an impact on your decision.
In rapidly developing metropolitan areas where land values are high, it’s becoming more difficult to find reasonably priced properties within easy commute of town centers. Acreage whose “highest and best use” is for future development will be priced beyond the reach for most horse aficionados. You may need to broaden your search regarding price range, size, amenities or commuting distance to find a more affordable option. As long as you are within easy access of major roads or interstates you may be able to expand your range.
Now make the dream come true...
You’ve been pre-approved for financing, selected a realtor specializing in horse farms, pored over newspapers, the internet and MLS sites, and now you’re ready to begin your quest for that special equestrian property. If you don’t find the perfect farm or ranch right away don’t be discouraged. Rest assured once you find that perfect mini-Calumet Farm or King Ranch, your agent will help you negotiate terms and guide you through the buying process to make your dream a reality.
An accepted purchase agreement is not the end of the journey; the steps from accepted offer to successful closing will be covered in our next article.
In the meantime...happy hunting!
Claire Panke is a Realtor associated with the F. C. Tucker Company Inc. of Indianapolis. With over 27 years experience in the real estate profession, Claire specializes in horse & country properties, residential real estate, land and relocation in central Indiana. She is also a life-long breeder and exhibitor of show and race horses, a horse show manager and announcer, and an editorial contributor to the publication Saddle Horse Report.