The two biggest concerns with buying or selling horse farms are the zoning and the intrinsic value versus the actual value paradox. These two items are closely related, and the financing of many horse facilities hinge on these concerns.
Here is the rub, the banks/lenders Do Not assign very much value to land. Therefore the market value, ie, what the seller wants and what you need as a horse farm buyer typically will Not appraise. To be even more specific for example, you find a horse facility that is listed at $300k and you negotiate a purchase price of $285k. You assume you can purchase this unit conventionally with 3% down or $8,550 cash down. You have a very large monthly income and great credit and you tell your experienced Horse Farm Realtor not to worry, that you will get the loan. Then, the bank sends the appraiser out in the eleventh hour of the transaction and as a buyer the whole family is overly excited to get on to their new farm. The appraisal comes in at $225k. Oops, now you must come up with another $51,450 cash to make the deal happen. Do you have an extra $51,000 dollars laying around, do you think the seller will drop the price, or do you think you can appeal the appraisal? All very unlikely scenarios.
The other issue is zoning. Most lenders working and operating in the residential re-sale market will Not be able to accommodate a loan that is zoned farm, agricultural, or anything that the underwriter sees that is not zoned “residential”. Again, this becomes an issue. You may be able to overcome this hurdle with more money down, and/or we can give you a couple lenders that will do horse farm loans. Lastly, you may be able to secure financing thru your local bank where you have a checking and savings account.
So, in reality the buyer and seller of many horse facilities are both operating under the illusion that what they are buying or selling is worth a lot more than reality will dictate.
Then you add to this the fact that most horse farms are located in remote areas so we often have well & septic concerns, you have live stock and equipment concerns with both the showings and the logistics of moving.
I would contend that managing the sale of a horse facility is the most complicated real estate transaction a Realtor can get involved in. We are quite capable of helping both our horse farm buyers and abundantly capable of helping folks that are looking to purchase a single family home.