Commission when buy and sell. 5X higher than real estate commission?

Our son has an equitation horse valued in the 200k range and are looking to switch to a jumper in the $200K range. Love our trainer but he is telling me the standard buying and selling commission structure is 15% to the buying trainer and selling trainer. Example:

Buyer pays 15% to buying trainer
Seller pays 15% to selling trainer
Total of 30% per transaction.

In other words, for us to change horses, we’d have to pay $30K to sell our $200K horse and $30K to buy the new $200K horse…a total of $60K for a horse we recently purchased for about the same price.

To me, this amount sounds high considering the trainer makes money off shows, stable and more. The transaction also involves a premium horse, not a $5K horse where the commission would be negiglible. If this was a house, the commission would be 6% and the seller/buyer agent would split it.

How do you justify selling or buying a horse for a 5X premium over buying a house?
Any experiences to share? Again, I am looking for insights from others on industry standards. We want to make sure everyone is compensated fairly.

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Industry standard for commissions is is anywhere from 10 to 20%. I don’t see anything out of the norm here—yes, it is a lot of money, but because commissions are a percentage of the purchase price, higher value horses equal bigger commissions. That’s just how it is, there’s a reason why they call it the sport of Kings LOL

And yes, you pay two commissions— One for selling the first horse, and a separate one for buying the next. This is because the trainer is going to spend time both selling the first horse, and then finding the next one.

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there have been more than one showdowns with trainers over sales commissions, after refusing to sell our kids’ western pleasure horse the last time my solution was to just bring my horse home (trainer’s wife in her mind was spending the commission which was never discussed, ended an over two year relationship) (and show expenses could never be estimated anywhere near what was actual there was always something that was just added on until we loaded the horse up and brought her home …per the trainer’s wife only to Ruin a perfectly good horse)

Several of our friends were like OP, buying a new horse when their kids decided to change disciplines, we just bought more tack for the horses . These friends were spending great sums. A few asked us where we kept getting competitive horses that looked just like our “old horses”

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Never seen the buyer trainer commission, that’s a new one to me. Seems like the buyer should pay that to their trainer?

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I think they’re meaning they’re paying a “seller” commission as part of selling the Eq horse, and a “buyer” commission as part of buying the jumper. The buyer of the Eq horse will be paying their own trainer whatever commission that trainer charges.

Edited to add: yes two commissions when selling a horse and then buying another is normal. The industry standard is 10-20% per horse/transaction.

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I think it depends where you live. Where I am (and in a different discipline) 10% seems to be the standard, and it’s often built in to the sale price. So if my horse sells for $100k, my trainer who has been prepping it, advertising it, and showing it to buyers gets $10k and I get $90.

If I’m horse shopping for a $100k horse and my trainer find and / or reviews potential matches, test rides them, watches me ride them, and deals with the PPE and buying process, I pay the seller $100k and I pay my trainer $10k.

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BigMama1, you math seems more reasonable. 10% seems fairer to me. In our case, that would be a $40K commission over the course of a few months (20K buying and 20K selling).

Totally agree the trainer should receive compensation for both selling and buying a horse. It’s just the % I find high. If a trainer buys/sells a $200K horse every other month making 15% each transaction, that’s $360K of commission annually outside of the lessons, boarding etc. That’s a pretty solid intake of revenue

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It is, but let’s assume your trainer is running a boarding facility. Virtually nowhere makes a dime off board (if anything, they’re slightly in the red), so the trainer’s income must come from training, showing, lessons, and sales. That $360k, which is generous unless you’re at a tip-top program, might result in a salary of $100k for a job that is well over 40 hours a week, involves nights, weekends, early morning, and dealing with some of the most obnoxious, entitled people on the planet. I’d almost guarantee that a big chunk of that $360k is reinvested into their business through facility upgrades, staffing, and general overhead.

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This thinking is what baffles me about people in this industry. Yes, 360k in commissions in a year may seem like more than you think someone should be making. But if that’s their price, and they’re doing the job and doing it well, why shouldn’t trainers and barn owners (and instructors, coaches, etc) be allowed to make more than a scraping by income? If you don’t want to pay your trainer that much commission, sell the horse for more and buy the next horse for less. Otherwise, pay the commission that is asked for, or be prepared to find a new trainer.

10-20% is definitely industry standard. Some trainers charge more on the buying end and less on the selling end or vice versa. Some trainers will charge way less commission if it is a horse in the barn already. Some will get the buyer and the seller to split a commission amount if it is going from one current customer to another. There are all kinds of ways this can go, but it sounds like your trainer has been clear that it’s 15% to sell and 15% to buy, and you should be prepared to do that.

It is EXPENSIVE to run a barn, especially if the trainer is leasing a facility. Lessons, board, and show fees alone probably aren’t covering all the costs. The commissions help finish paying for whatever needs paying, and then can go toward the trainer actually doing something for themselves or for creating a retirement fund for themselves. There should be nothing wrong with the people in this industry making enough money to live comfortably, instead of just trying to get by.

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I think the real thing people are scared of is when their trainer makes more money than they do…

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Like anything in the capitalist system, this is a matter of supply and demand. There are very few people who know how to buy and sell a 200k horse, so the value of their service increases.

Similarly to the real estate market which you compare to, an agent who sells a 2mm property makes the same percentage as an agent selling a 200k property. The workload may be similar in both cases, but the network of buyers, know-how, and nuances is a skill that is of worth, especially the higher up the price scale you climb.

10-20% being the norm as echoed herein is not out of line, but I will concede it is the same sticker shock of selling a 2mm condo that has offers in one day as the 200k family home that takes 60 days to sell. In that respect, I get it.

The rate is the rate, and at least the trainer is up front and transparent in costs on both sides. Much better than surprises we’ve all read about here on COTH.

I suppose it’s the same reason why people try to FSBO their homes and wonder why there are no buyers - professionals want to work with professionals.

You might try and negotiate a different deal, but be prepared to have a reduced offer declined, especially as long as the market remains this hot. If your local economy tanks, that may change.

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What commission did you pay when you bought the $200k eq horse?

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Interesting takes on this.
In my world, the horse seller is the one ultimately responsible for the commissions.
So I know if my trainer is handling the sale of my horse, I’m paying her a commission and also the buyers trainer would also get a commission out of that sale number.
So how that would work is: I price horse for 100, less commissions. Standard for my industry is 10% on either side. So I know if the buyer pays 100, I’m netting 80k.
Or I could say to my trainer, I was 100k in my pocket and let my trainer price the horse however she wants to take care of the commissions. That might mean she makes more than 10% but she might also choose to take less than 10% to make the deal work.
The buyers trainers commission comes from my side because they recommended the horse to their client for purchase and it’s on them to make the new match work.

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I don’t think it’s really “fair” to compare the actual % number to a completely different industry. But I do note that in many, if not nearly all, other industries, and especially real estate, the % commission decreases on higher-priced items. Usually, IME, the realtor commission on, say, a $10million house is more like 1-1.5%, not 3%, per realtor. I know people that work in ad sales, and their commission % was 12-15% when selling lower-value local tv stations, and 6-8% when selling for national networks.

If it ever were in my realm of remotely possible possibilities to entertain horses in such a price range, I too would likely have expected a lower % number if selling/buying a $200k horse compared to a $20k horse.

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If it’s industry standard, why is that a problem?

It’s an interesting line of work when the customers aren’t comfortable with the service providers making money from working at their careers.

As far as paying commission on both selling the old one and buying the new one, that’s the case with real estate as well, even if the % is lower on each.

You may be able to negotiate the commission. But as with real estate, give some consideration as to what the trainer is putting into the effort. Do you want them to do less? That’s what real estate agents think about when people want to ask them to take lower commissions.

But they don’t want to cap their own income they way they want to cap the trainer’s.

Is there an ego thing here - trainer works for me so shouldn’t earn too much? Are they as worried about what their financial advisor or stock broker are earning?

This is what it comes down to. The trainer has leads in the market that a private owner never will. That’s part of what they are selling. They know how to present a horse to a buyer (or should). They spend endless time on the phone and know how to talk with people interested in the horse. And so on. It’s how they do what they do.

Not for nothing, very possibly a trainer is going to get a more favorable price, selling and buying, than if the client did it on their on. That offsets part of the commission. Would it offset all of it? Depends on the transaction, of course.

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Prices are what the market will bear, I guess. Same with real estate agents selling $20 million properties. Some people think a 5 or 7% commission is too high, others think it’s money well spent to have an expert agent acting on your behalf and steering you away from potentially bad situations.

Part of me also thinks that anyone who can afford a $200k horse probably doesn’t need to quibble over an extra $15%

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My trainer makes WAY more money than I do. She also works way harder and for way more hours a day than I do. Why would anyone begrudge them for earning good money?

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My trainer and her husband’s combined income is certainly more than mine-- that’s why they have a farm with a gorgeous indoor and hot water and I don’t. :rofl:

If you are in the position that you are buying and selling a $200k horse, you should be paying your trainer. I know this is the horse world, you can’t fault people for having money, I have a bit of resentment from watching kids show their $$ horse while I scraped by in the bottom of the ribbons on my backyard-bred QH, people mortgage their house to buy horses, etc., but nobody’s flinging $200k around on a whim.

Also, 30k is what gets you a nice horse nowadays-- so that 30k isn’t even going toward a downpayment on a house, most likely. It’s probably going right toward their next horse, which will then be sold to buy the next one, etc. There is very little static income in the horse world.

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Did you not pay a commission for your $200k “Big Eq” horse? I find this post unusual, because if your child has truly been riding at that level, one would think you understand how the business works…

The buyer pays the “buying trainer” a commission aka a “finders fee”. The trainer is taking the time to call their contacts about horses for sale that would be suitable, pre-screen horses that seem interesting (maybe riding them first to make sure they are appropriate, maybe researching it by looking at show record online, videos of horse at shows, reviewing radiographs and pre-purchase findings with veterinarian, etc.) There are hours and hours invested into helping clients find their best match, and trainers need to be compensated for doing so.

The “selling trainer” also doesn’t work for free. If you want your horse marketed and advertised, mentioned to buyers, presented to potential buyers for sale appointments (which can include the trainer riding the horse to show off how talented/safe/sane/well broke, etc.).

If your trainer helps you to sell your horse, they get a commission. If they help you look for and purchase a horse, they get a commission. Whether or not those things happen within a week of each other or 6 months apart, they are separate projects for the trainer and should be counted as 2 separate business deals.

In today’s world, 10-20% is pretty standard.

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