In an effort to better understand the mechanics of an appraisal, we will give some general guidelines of preparation.  When performing an appraisal, Headley attempts to inspect the animal whenever possible, giving a general observation of its conformation and physical appearance.  It is assumed that this animal is healthy in all respects and is free of any bad habits which might be prevalent with a Thoroughbred, i.e. broodmare, stallion, or racehorse, etc., unless otherwise noted.

The appraised value, or fair market value is determined based on his opinion as to what this individual might sell for at an appropriate public auction at a date close to the effective date of the appraisal when offered to a knowledgeable, willing buyer by a willing seller, void of other enticements or considerations.  The appraisal value takes into account the conformation as well as the pedigree which includes, but not limited to, its racing ability and whenever possible relates to recent trades or comparable offerings.  Naturally, actual value depends on at least two people wanting this animal at public auction and since no one can ever predict if this will occur, he often gives a range of value that he believes to be the lowest possible value as well as the highest possible value and then assigns the actual value somewhere in between.  Although there could be a discrepancy between an appraisal and an ultimate sale price, it is more than likely that variables such as changes in the horse’s age, use, physical condition, performance, progeny performance, fertility, breeding status and performance of relatives, would be contributing factors for justifying such discrepancies.  Additionally, time lapse from date of appraisal, changes in general market conditions and proper market testing at an appropriate auction could become factors in appraisal/actual sale discrepancies.