In this article
Bloodstock and racehorse sales work through a calendar of public auctions organised by the age and purpose of the horse (yearlings, two-year-olds in training, horses in training, breeding stock), alongside a private market run by agents. At auction the horse is sold to the highest bidder above the seller's reserve, on the sales company's published conditions: the buyer takes the horse largely as it stands, the risk usually passes when the hammer falls, and the grounds for handing a horse back are short lists with deadlines counted in hours or days.
The rules described here come from published documents: the conditions of sale of two sales companies, one in Kentucky and one in Australia, the Bloodstock Industry Code of Practice that governs sales in Britain and Ireland, and a Kentucky statute on horse sales. Conditions differ between sales companies and between sales, so only the conditions printed in the catalogue you bid from bind you. This is general information, not legal or tax advice.
Published conditions of sale of a Kentucky sales company (2015 edition) and an Australian one (2026 catalogue); Kentucky Revised Statutes, section 230.357.
What kinds of bloodstock sales are there?
Bloodstock sales fall into four main types, defined by the age of the horse and what the buyer intends to do with it: yearling sales, two-year-old in training or breeze-up sales, horses in training sales and breeding stock sales. Each gives the buyer a different amount of evidence.
A thoroughbred's age is counted from an official birthday shared by every horse in its hemisphere, 1 January in the northern hemisphere and 1 August in Australia and New Zealand. A yearling is therefore a horse in the year after its birth, and buyers check the foaling date, since a late foal is physically younger than its catalogue age suggests.
| Sale type | What is sold | What the buyer can judge |
|---|---|---|
| Yearling sale | Unbroken horses in the year after birth | Pedigree, conformation, walk, veterinary records; no evidence of ability |
| Breeze-up or two-year-old in training sale | Young horses already ridden, shown in a short timed gallop | All of the above, plus how the horse moves at speed |
| Horses in training sale | Horses that have raced or are ready to | Race record, ratings, soundness after training |
| Breeding stock sale | Foals, broodmares, fillies off the track, stallion shares and seasons | Pedigree, produce record, pregnancy status, covering sire |
The further down the table, the more is known about the horse and the less the price rests on hope. A yearling is bought on what it might become; a horse in training has a form line anyone can read, and its price stays closer to what it has shown.
Who are the people involved in a bloodstock sale?
A bloodstock sale involves six roles: the breeder, the consignor, the sales company, the bloodstock agent, the trainer and the veterinarian. One person can hold two of them, and knowing who is acting for whom is the first thing a newcomer has to establish.
- The breeder owns the mare, pays for the mating and raises the foal.
- The consignor prepares the horse for the ring and presents it at the sale, then shows it to every buyer who asks during the inspection days. Some breeders consign their own horses; many use a specialist consignor, paid a fee and a commission. A pinhooker is a buyer who becomes a consignor: buying a foal to resell as a yearling, or a yearling to resell at a breeze-up sale.
- The sales company publishes the catalogue and the conditions of sale, runs the auction, collects from the buyer and pays the seller, for a commission and usually an entry fee charged to the seller.
- The bloodstock agent advises a buyer or a seller for a fee, usually a percentage of the price. For a buyer, the agent shortlists, inspects, commissions the veterinary work, values and bids; for a seller, the agent finds a private buyer or advises on which sale to enter.
- The trainer often does the agent's job for clients, alone or alongside an agent, and will train the horse afterwards. The codes of practice treat a trainer's share of someone else's commission as something to disclose.
- The veterinarian works for whoever engages them. The seller's veterinarian produces the records lodged before the sale; the buyer's reads them and examines the horse. Under the Australian conditions read for this article, the veterinarian carrying out a buyer's examination acts as the buyer's agent, not the auctioneer's.
How do you read a catalogue page?
A catalogue page gives the horse's identity, its pedigree set out by generation, and the racing and breeding record of its female family, with the best performers picked out in bold type.
The top of the page carries the lot number, the consignor, the colour, sex and foaling date, and a pedigree diagram. Below it come a paragraph on the sire, then the female line dam by dam. The first dam is the mother, with her own race record and every foal she has produced; the second dam is the grandmother, with her best descendants; the third dam follows in less detail.
Bold type, known in the trade as black type, is the shorthand for class. Under the International Cataloguing Standards, established by a committee of that name and approved by the Society of International Thoroughbred Auctioneers, the first three finishers in group or graded races and listed races in the qualifying countries receive black type. Winners are printed in upper case and horses that finished second or third in lower case. The standards sort racing countries into parts, and races in the third part confer no black type.
Two habits make the page more useful than its bold type alone. Count where the black type sits: under the first dam it describes brothers and sisters, under the third dam distant cousins. And look at the dates, because a family whose good horses all raced long ago is a different proposition from one with a stakes winner last season.
The catalogue page is also a contractual document. A horse is sold as described in the catalogue, as corrected by any announcement made from the rostrum before bidding starts. That description covers identity, age, sex and pedigree, not soundness: the Australian conditions read for this article state that each lot is sold with all its faults and that neither the auctioneers nor the vendor give a warranty of soundness or fitness.
How are horses inspected before the sale?
Horses are inspected on the sales grounds in the days before the auction, first by eye and then through the veterinary records the seller has lodged in the sale's repository. The inspection is the buyer's main protection, because the conditions of sale assume it has been done.
You ask the consignor's staff to bring the horse out, look at it standing, then watch it walk away and back. Buyers judge conformation (how the limbs are put together and whether they will stand training), the walk and temperament. A breeze-up sale adds the gallop, which buyers time and film.
The repository is a room, or an online system, where the seller's veterinary records are held for buyers' veterinarians to read: radiographs of the joints taken shortly before the sale, and often a video of an endoscopic examination of the upper airway. A guide for vendors and purchasers circulated by the Thoroughbred Breeders' Association in Britain describes vendors arranging video endoscopy shortly before sale and leaving the video at the repository.
Further examination before the sale needs the vendor's consent. In the Kentucky conditions read for this article, the buyer is charged with knowledge of any defect that a reasonable inspection, including a review of the repository, would have revealed, and the sales company states that it does not itself review what is lodged. A buyer who sends no veterinarian to the repository is therefore treated as if one had gone. And a set of radiographs is an opinion at a date: two veterinarians can grade the same image differently.
How does the auction itself work, and what are reserves and buy-backs?
At a bloodstock auction each horse is led into the ring in catalogue order, the auctioneer takes rising bids, and the horse is sold to the highest bidder provided the bidding has reached the seller's reserve. A horse that does not reach its reserve is bought back by its seller and leaves the ring unsold.
The reserve is the minimum price the seller will accept, given to the sales company in confidence before the horse sells. The seller is allowed to protect it. The Kentucky conditions read for this article let sellers bid on their own horses, directly or through agents, and set undisclosed reserves; the Australian conditions let the vendor, or an agent including the auctioneers, bid and buy the lot in. A buyer who has fixed a limit beforehand is unaffected by it.
What the published rules do not allow is collusion. The Bloodstock Industry Code of Practice forbids participants from entering into any agreement to push up the price of a horse at a public sale, and states the exception plainly: the vendor's reserve, and one bidder appointed by the vendor where the auction rules permit it.
- Register and arrange creditOpen a buyer's account before the sale and, if you will not pay on the day, apply for credit in advance; an Irish sales company's guide asks for the request at least 7 days before the sale.
- Shortlist, inspect and vetCut the catalogue to a list, see each horse walk, and have the repository records read for those that remain.
- Fix a limit for each horseWrite the figure down before the horse enters the ring.
- Bid, and sign if you are the buyerWhen the hammer falls, staff bring the acknowledgement of purchase to sign. From that moment the horse is normally at your risk.
- Use the post-sale windowOrder any post-sale examination the conditions allow inside the stated hours and before the horse leaves the grounds.
- Pay, insure and collectSettle the account or confirm your credit and arrange transport; the horse is released once the account is cleared.
A horse that fails to make its reserve is recorded as not sold, bought in or passed in, depending on the country. Interested bidders often approach the consignor afterwards, and the Irish guide provides for private sales of lots that failed to sell in the ring to be registered with the sales company.
When does risk pass, and when can a horse be returned?
Risk in a horse sold at auction normally passes to the buyer at the fall of the hammer, and a horse can be returned only on the specific grounds listed in the conditions of sale, each with its own short deadline. Outside those grounds, a defect discovered later is the buyer's.
The Australian conditions say that from the fall of the hammer the lot is at the risk of the purchaser in all respects, while title passes only when the purchase price is paid. The Kentucky conditions pass title and risk of loss at the fall of the hammer, with an exception in that edition for certain racing prospects shipped out of state. The Irish guide tells purchasers that horses are at their risk from the fall of the hammer or the time of private purchase, and recommends insuring from that moment.
The table sets out what the two sets of conditions read in full provide.
| Ground | Kentucky conditions (2015 edition) | Australian conditions (2026 catalogue) |
|---|---|---|
| Listed upper-airway conditions, not announced | Examination within 24 hours of the session, before the horse leaves; notice within 24 hours | Examination and notice within 48 hours of the sale, before the horse leaves |
| Crib-biting or wind-sucking, not disclosed | Within 48 hours of the session | Within 7 days of the sale, on a veterinary certificate |
| Wobbler, not disclosed | Within 48 hours of the session | Within 7 days of the sale, on a veterinary certificate |
| Certain undisclosed surgeries | Within 14 days of the sale | Not listed |
Both sets settle disputes the same way: the buyer gives written notice with a veterinary certificate; the seller either takes the horse back or answers with a contrary certificate; and the question goes to an independent veterinarian or panel appointed through the sales company, whose decision binds both sides.
Three further limits apply. A vice or surgery announced from the rostrum or disclosed in the repository is not a ground at all. In the Australian conditions an error or misdescription in the catalogue does not annul the sale, and any claim against the vendor or the auctioneers must be raised within 28 days of the sale. And testing for prohibited substances is usually an option the buyer has to exercise: in the Kentucky edition the buyer elects the test at the time of sale and pays for it, and may reject the horse within 24 hours of receiving a positive result.
What does an agent charge, and what must an agent disclose?
A bloodstock agent is paid a commission by the person the agent acts for, and under the published codes any other benefit from the transaction must be disclosed to that person and agreed in advance. The rate is a matter of contract; the disclosure is not.
The Bloodstock Industry Code of Practice, published by the Bloodstock Industry Forum with the British Horseracing Authority, covers sales in Britain and Ireland after 16 August 2021, private sales and auctions alike. It applies to every participant, vendors, consignors, trainers and syndicate managers included, and treats anyone acting for another person in a sale as an agent, formally appointed or not. Its central rules are these:
- An agent must not profit from the position of agent without the prior informed consent of the principal, and that consent must be explicit and evidenced in writing.
- An agent must not be placed where the agent's interests conflict, or may conflict, with the principal's without the same consent. Acting for both buyer and seller requires the consent of both, and the explanatory notes add that even a small share held by the agent in the horse needs consent.
- A vendor must not offer a buyer, or a buyer's agent, a financial advantage for bidding or buying, and the buyer's side must not ask for one. The notes state that such payments are prohibited whatever they are called, luck money included; an advantage open to the whole market is excepted.
- A trainer or syndicate manager who shares in the purchaser's agent's commission needs the purchaser's prior informed consent.
Kentucky has put similar rules into statute. Section 230.357 of the Kentucky Revised Statutes makes acting for both buyer and seller unlawful unless both know beforehand and consent in writing. It forbids an agent to accept anything worth more than $500 in connection with the sale from anyone other than the agent's own principal unless the payment is disclosed in writing to buyer and seller and each consents in writing. A person injured by a breach may recover three times the overpayment and the undisclosed payment, plus costs and legal fees. An agent who acts for one side only and is paid only by that side has nothing further to disclose.
For a buyer the practical form of all this is a short written agreement signed before the sale: who the agent acts for, the commission rate and what it is calculated on, whether the agent or the trainer has any interest in any horse on the list, and a statement that no other payment will be received.
How do private sales and syndicates work?
A private sale is a sale negotiated directly between owner and buyer, usually through one or two agents; a syndicate is a group of people who own a horse in shares and split its costs and returns.
Private sales cover horses that never reach a catalogue: a horse in training bought after a promising run, a mare, a stallion share. With no published conditions, the contract has to do the work: the horse's identity and registration, the price and currency, a veterinary examination as a condition and who chooses the veterinarian, the moment risk passes, the moment the registration papers are transferred, and every commission payable with the name of who pays it.
Syndicates and racing partnerships spread the cost of a horse. A manager buys the horse, often through an agent, divides it into shares, collects each owner's part of the purchase and then a monthly contribution to training. On the illustrative yearling costed in the next section, the purchase with agent's commission, examination, transport and first-year insurance comes to $220,100, or $22,010 for a 10% share, and the keep that follows averages about $386 a month for that share. A syndicate agreement states the shares, the budget and how further calls are made, who decides where the horse runs, how prize money and sale proceeds are divided, and how a member leaves.
When a horse owned by several people is sold privately, one price has to reach several accounts. Take an illustrative sale at $300,000 with a 5% selling agent and four co-owners holding 40%, 30%, 20% and 10%. The agent is due $15,000 and the owners $114,000, $85,500, $57,000 and $28,500, which is 5%, 38%, 28.5%, 19% and 9.5% of the price. The usual route is one payment to a lead owner or manager, who pays the others. A payment router such as Shaka is another: each party's share is set as a percentage of the deal and can be signed by that party before the buyer pays, the buyer pays once, and every party receives their share at the same moment in one transaction, with the router never holding the funds. Every recipient can see what the others were paid, which suits a sale where the commission has to be in plain view. A deal can have at most 20 recipients, and the transfer of the horse and its papers remains a matter for the sale contract.
What does a horse cost after the hammer falls?
After the hammer a buyer pays the agent's commission, the post-sale veterinary work, transport, insurance and then the monthly cost of turning a young horse into a racehorse, and that monthly cost does not depend on what the horse cost. On a mid-priced yearling the bills of the first year or so can add more than a third to the purchase price.
The figures below are illustrative, chosen to show the arithmetic, and are not market rates. They assume a yearling bought for a hammer price of $200,000 and followed for fourteen months, at the rates shown in the table. Sales tax, VAT or GST is left out because it depends on the country, the buyer's status and whether the horse is exported.
| Cost after the hammer | Basis | Amount |
|---|---|---|
| Buyer's agent | 5% of $200,000 | $10,000 |
| Post-sale veterinary examination | Flat | $600 |
| Transport from the sale | Flat | $1,500 |
| Mortality insurance, first year | 4% of $200,000 | $8,000 |
| Breaking and pre-training | 6 months at $2,500 | $15,000 |
| Training | 8 months at $4,000 | $32,000 |
| Veterinary, farrier, registration, entries | 14 months at $500 | $7,000 |
| Total after the hammer | $74,100 |
The buyer's outlay to the horse's first months on a racecourse is therefore $274,100, and the $74,100 of costs equals about 37% of the hammer price. Only two lines, the agent and the insurance, move with the price: together 9% of the hammer. The other $56,100 is the same for any horse, and the chart shows what that does at three price levels.
Illustrative figures computed from the assumptions stated above the table. Tax, and any cost after the fourteenth month, is not included.
The inexpensive horse is the expensive one to own in proportion: at $50,000 the costs after the hammer come to 121% of the price, against 16% at $800,000.
What does the seller receive, and what does an unsold horse cost?
A seller at a bloodstock auction receives the hammer price less the sales company's commission, the entry fee and the consignor's charges, and a seller whose horse is bought back pays most of those charges with nothing coming in.
Using the same illustrative $200,000 yearling, assume the sales company charges 5% of the hammer price and a $1,500 entry fee, and the consignor charges 5% of the hammer price plus 90 days of sale preparation at $50 a day, which is $4,500. The deductions are $10,000, $1,500, $10,000 and $4,500, or $26,000 in all, and the seller receives $174,000. That figure is before the stud fee and the keep of mare and foal.
Now suppose the same seller sets a reserve of $150,000 and the bidding stops short of it, so the horse is bought back at $145,000. If the conditions charge 2% of the buy-back price, again an illustrative rate, that is $2,900; with the entry fee and the preparation the seller has spent $8,900 and still owns the horse. What is actually charged on a lot bought in is stated in the conditions or the entry form, and is worth reading before the reserve is set.
Payment follows the conditions in both directions. The buyer pays the sales company, on the day unless credit was approved beforehand, and the sales company pays the seller after deducting its charges on the date its conditions give.
