Commission protocol

[Oakstable]

What is the commission on a sale if the breeder handles the marketing and contact with the buyer, and then the trainer follows through with discussing the horse NEW to the training barn with the buyer? And presents the horse.

Case in point. Trainer wants 10% commission on the sale of the horse. I pay boarding and training expenses, and all incidentals.

Horse goes into training this coming week. A buyer who had contacted me previously wants to see said horse and buys him before the trainer has invested much time into him. Two days, two weeks … of training. In other words, not a lot.

Buyer is looking at a horse that is priced without factoring in a sales commission.

One friend of mine says the trainer should be finding the buyer in order to get a commission since he is getting training fees.

What to do.

[Sabino_Farm]

I’m interested hear this one too. I had these issues all the time.

[kokoda]

IMHO, there are two types of fees … one is a referral fee and the other a commission. A referral fee is when someone refers a potential buyer to you that ultimately purchases a horse. The other is commission like a brokerage fee. If they are actively involved in the sale of the horse (i.e., bringing in the client and helping sell the horse), they are entitled to a commission. I guess you could think of it in terms of real estate and could split commission if more people get involved.

If you are paying a trainer to work with your horse … that’s what they’re being paid for, training your horse. If while doing so, they bring you a client, then they would be entitled to another fee.

That’s my two cents … :winkgrin:

[CBoylen]

Most trainers do not take in horses without the understanding that there is a 10% (or whatever) commission due if the horse gets sold during the time it is in training. Regardless of who does marketing and made contact first, and certainly if trainer is expected to present the horse to buyers.

[RyuEquestrian]

[QUOTE=CBoylen;5724637]
Most trainers do not take in horses without the understanding that there is a 10% (or whatever) commission due if the horse gets sold during the time it is in training. Regardless of who does marketing and made contact first, and certainly if trainer is expected to present the horse to buyers.[/QUOTE]

This has been our experience as well.

[Equilibrium]

I have a better one for you. A good friend of mine has a mare in training with an event rider for a year with view to selling mare. Was payed in full on time for all training. Mare came home for winter and after winter decided to do all the work herself and take her to the events and ride. 6 months after leaving trainer, owner found a client and horse was sold. Axed trainer found out and demanded her 10% or she would sue.

Firstly, trainer was axed because the mare had gone to be sold. From spring til October not one client came to look at horse. Other horses sold from barn but they were horses in the yard on a deal. Meaning trainer not paid until horse sells. Owner was talking to a friend that was looking for the type of horse she had and told this person the mare was with so and so. This person said he’d already been there and was told there was nothing like that in the barn. Basically why lose the horse you get paid for in full every month. So owner got rightly annoyed, brought horse home, gave her a little break as in 4 months then sold her when she started back 6 months later.

I know if this were me I would have told former trainer to stuff it where the sun don’t shine. Trainer was paid every penny for the job she did and had no part in sale. Trainer didnt really want to sell because getting a full monthly is valuable as well. Still this woman paid her.

And on the reverse, in the course of starting youngsters for people occasionally one has been sold during the process or while still at my place. I never asked for nor did I think I was entitled to any payment resulting in sale. I was getting paid to do my job and I did not refer or find these clients. I guess you can argue my job isn’t as important but still important none the less. If you’ve ever had one started badly then you might know it’s not easily fixed. Still I know my place and don’t expect people to hand over their cash just because it was on my place. In fairness since I had to be present during the riding or showing of said horse on the day, i was paid for my time.

Maybe I’m wrong but I try to at least be fair.

Terri

[system]

t he can carry all this things by his popularity.

[tuckawayfarm]

[QUOTE=CBoylen;5724637]
Most trainers do not take in horses without the understanding that there is a 10% (or whatever) commission due if the horse gets sold during the time it is in training. Regardless of who does marketing and made contact first, and certainly if trainer is expected to present the horse to buyers.[/QUOTE]

This.

[Janet]

It is something that should be discussed BEFORE the horse goes to the trainer. But, barring a prior agreement otherwise, I agree with CBoylen.

[Dune]

@Janet;5725656

It is something that should be discussed BEFORE the horse goes to the trainer. But, barring a prior agreement otherwise, I agree with CBoylen.

THIS^^^ You can agree on any amount/percentage ahead of time, but 10% is typical. Tell the buyer the price went up since you had to send the horse to the trainer, she snoozed and now she’s gonna “lose” a bit. Or, you can always try to negotiate a little with the trainer on this deal and offer to send her another horse when this sale is complete…and do remember, this deal is far from done.:yes:

[ise]

I also DITTO the fact that the discussion should be in detail beforehand AND in writing. It should also specify that the trainer is acting as agent for the owner. How and when the “agency agreement” exists.

If a horse leaves a farm and returns to the owner - the owner does not owe the trainer a commission unless the buyer was brought by the trainer. And in that case the buyer should be paying the commission.

We won’t do double-agency sales. i.e. the trainer or anyone else bringing a buyer that results in a sale will only receive a commission if they are NOT representing the buyer and receiving a commission.

In the case of the axes trainer who is threatening to sue. What does she think she’s suing for? Horses not in her barn purchased by people SHE DID NOT REFER - is a transaction in which she provided NO SERVICE. So she isn’t owed any compensation.

[Spike]

I think if a trainer wants a commission from a possible sale while under his training,(5%, 10% whatever), said trainer should disclose to the owner his intent BEFORE the horse is brought to training…

If a trainer can assume that he would get a commission, then… on the other hand, a owner can also assume that he doesn’t have to give a commission if the trainer didn’t mention it!! I think, for a owner/seller who is looking for a trainer, this part of the deal counts in the selection of the trainer. I personnaly would be willing to give a commission on a sale IF we agree on a cheaper price for training. It goes on both way. No discount on training, no bonus on a sale. I pay in full, I get full selling price. Slighly lower training fees but a bonus on a sale? Can certainly help the trainer to want the horse sold for a good price, and this might mean better training in a decent timeframe (who never fell on a trainer that wasn’t able to w-t-c the horse after 6 months??)…

Just MHO.

[Oakstable]

Autumn,
I think you are onto something.
I have had the situation of not paying for training fees, but paid 15% in commission to get the horse trained and sold. The trainer had incentive since endless training for the same 15% in a soft market could end up being a bad deal for the trainer.

If the breeder pays all expenses, including training fees, and the carrot on the stick is 10% if/when the horse sells, is this an incentive?

In this market, it is going to take a lot for a horse to appreciate significantly.

So steady training income might be more attractive.

What would change my view is if the trainer networked and brought buyers, it would be above and behind routine training, and worth a commission.

Having a buyer come to watch the trainer ride the horse in a routine training session, then discussing the horse with the buyer … that’s worth, say, $2K on a $20K horse? (I do not have that situation pending whatsoever, btw.)

I have extremely limited experience in this.

I do have a friend who has used a trainer who said if you bring the buyer, we’ll ride the horse for your buyer just as part of our daily training routine, no commission in that situation.

[Sunnydays]

I think you have a cheeky trainer. If the client is yours, and she just demos the horse, and has been paid to ride/train, then she is “compensated”. Different if she brings the client, and her sole compensation is commission.

[Oakstable]

Sunny Days.

Thank you.

So the requirement for a commission is that the trainer actively markets the horse to get the commission?

Otherwise they are compensated for their time in the saddle by being paid for training.

Ideally, if the potential buyer likes how the horse goes for the trainer, then takes a lesson with the trainer and the seller pays the $60 or whatever for that lesson.

I know the new law in CA cleans up the double dipping that has gone in horse sales, but I think there are some assumptions on what a trainer should do to qualify to be paid a commission.

For a real estate broker to get a sales commission, the broker actively markets the house, holds open houses, etc. In a strong market, sales just happen passively but we’re in a tough market for sales of any luxury product.

Years ago, we were selling a cute horse property. An agent “bought” our listing by exaggerating what he could sell it for. We signed up with him. I paid for ads, made flyers, even had a pencil drawing done of the house for artistic ads … he did nothing(!!!) but he got a 50% commission when a local broker sold the house because he had us under contract.

Small diversion, sorry, but I want someone to earn their commission.

[S_A_McKee]

Sorry, but just because someone tells you it’s standard procedure doesn’t make it ethical or in some states (depending on if the trainer is agent for both sides) even legal.

Trainers would love to have you pay 10% for them to smiply have someone watch a training session. I’;m always surprised that people who should know better go along with this scenario.

If you are an established client the trainer may very well want your return business and be willing to charge a reasonable fee for an evaluation or for showing it to a client that you bring to the table.

And NEVER EVER have the buyer pay the trainer. Make sure the buyer pays you the full price. Both buyer and seller settle with their trainers as separate transactions.

[CBoylen]

It’s never just a matter of letting someone watch a regular training session. Showing a horse to customers involves a lot more than that. It’s having the horse prepared (to go well, which happens in the days before, and to look well, which happens in the morning thereof) and presented, the ring/course, barn, and property prepared in a timely fashion and presented, the schedule cleared so that there are no activities happening to interfere, showing and talking about the horse, and if all goes well, attending the vetting and dealing with the professional on the other side.
Most importantly it’s putting the trainer’s reputation behind the horse. If a trainer shows a horse to clients the horse is being presented as being from his barn, will go forth with that reputation, and the trainer will be held accountable for how the horse conforms in the future to his presentation and representation of it. Your trainer’s reputation is a huge factor in any sale.
And again, you aren’t going to find many trainers that will take on horses that are on the market, show them to people at their facility, and not expect their commission on the sale. If there is a boarding or training contract it likely has a “all sales are conducted on a commission basis” clause.

[judybigredpony]

If you are paying a trainer to work with your horse … that’s what they’re being paid for, training your horse. If while doing so, they bring you a client, then they would be entitled to another fee.

That’s my two cents …

Unless its a training/selling contract and even then you can preempt any previous contacts from that contracr

Most trainers do not take in horses without the understanding that there is a 10% (or whatever) commission due if the horse gets sold during the time it is in training. Regardless of who does marketing and made contact first, and certainly if trainer is expected to present the horse to buyers.
so seriously wrong

If you worked in retail and another salesperson sold a dress you were pushing and happened to sell that dress to a customer who you never laid eyes on…you snooze you loose…I agree 100% w/ the 1st and CBoylen thats why this business sucks every swinging tom dick n harry has their hand out and the owner gets screwed.You earn a commssion if you worked for it…if the trainer wants a commission let them bring the buyer all the way to the table spoon feed them close the deal get a check…made out to the owner of the horse.

Guess I am from another planet, when a client sends a horse to be sold, they pay a flat boarding/selling fee, schooling fees are on a per ride bases, all advertising gets billed to customer and they agree on a budget for that. Vet and farrier they are billed dierctly by provider and when horse is sold the owner gets their check. I was paid to do a job…not rob the owner…key word owner of the horse…strange concept…

The board/sell fee include for my time and suffering w/ buyers :)…oh and its only for 90 days period then horse can go home. Nickle and dime to death should be some trainer/seller/agents slogan.

[Kmsuds]

agree with most that if you bring the client and you are paying “normal” training and board fees that trainer is not entitled unless they bring the client or client is found via their networking.

there are some places that lower their training fees when horses come in specifically for sale and if that is the case then I believe the trainer is entitled to the commission because the have lost training fees.

just my opinion

and agree with SA MKee that $$ should go to you first, have heard some very crazy stories with it going the other way,

[Oakstable]

What about a deal with no training fees, but a higher commission rate if the trainer can sell the horse within 90-120 days?

Seller pays for board, farriers, all incidentals.