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

[TXnGA]

@SmilingHorse

I was looking to this forum for some honest input as we try to make a decision and get educated. I have searched everywhere for info on industry standards and found very very little. Thanks all for insights as I wish I had this earlier. We love our trainer and want to make sure we are on track with compensating him properly. We have those better insights now.

But I am not sure why some are attacking those that ask the questions and calling them bizarre. We aren’t ultra wealthy and are putting way more than we should into our sons dreams. Why is it wrong to ask for insights when so many smart people here have the answers?

If you have a budget and need to make X into your pocket- tell your trainer that. I had a horse I sold into the big Eq market ( failed event horse) and I was very firm that I wanted X in my pocket and anything over that, the h/j trainer could keep. Negotiate- both sides need to be happy in the deal that is agreed to or there will be resentment. If your trainer gets $$$$$ for the training/ board/ coaching/ schooling/ etc see if you can negotiate down commission rates. Never hurts to ask.

As someone else mentioned, a jumper is not going to cost as much as a Big Eq horse, even a really really good jumper, ( unless your son is going to the Olympics in the next few years, and new horse is already competing at the 4/5* levels).

That being said, if you’re selling your big Eq horse for $200k, you don’t necessarily have to spend all $200k on the next jumper horse. Put a budget together. Stick to it. There are fabulous jumper horses under $200k. It’s ok to not spend all $200k on the new horse.

Start looking at ads to get an idea of where the market is. Don’t necessarily go out and look on your own, but looking at the ads helps you understand prices of horses on the market, experience, age etc.

[CBoylen]

@TXnGA

As someone else mentioned, a jumper is not going to cost as much as a Big Eq horse, even a really really good jumper, ( unless your son is going to the Olympics in the next few years, and new horse is already competing at the 4/5* levels).

What? Presumably if the kid is done with the big eq they need a junior or amateur jumper, not a ch/ad jumper. It’s going to cost at least that much. And you’re not going to see many ads for them; you’re going to need that trainer.

[candyappy]

@SmilingHorse

But I am not sure why some are attacking those that ask the questions and calling them bizarre. We aren’t ultra wealthy and are putting way more than we should into our sons dreams. Why is it wrong to ask for insights when so many smart people here have the answers?

Nothing wrong with your questions at all. If you hang around long enough you will see that there are some who just can’t help but look for what isn’t there, or add to what you didn’t say.

[TXnGA]

Not in my experience . Your experience may be different.

No where in my comment did I say they didn’t have to use said trainer?!?!

There are tons of horses listed on SM, big Eq, and many other websites. I suggested to the OP to see what is in the market, and get familiar with price points. Not go to try horses on their own without trainer.

[Rel6]

Of course they could spend the full $200,000 on a jumper, but I agree that for 1.2m/1.3m horse you don’t have to spend at least $200k.

[kirbydog]

100%
You’re not going to see the real high end 200k+ jumpers on horse for sale websites. You’re getting those horses from sellers that don’t use or require them. Just go price them down in Florida at any of the big circuit shows

[CBoylen]

You’re right, I just assumed in the scenario that they wanted a real one, but reading again it doesn’t actually say that.

[OverandOnward]

@endlessclimb

I know of a 6 figure horse (not quite 200k but VERY well on his way there) living in someone’s back yard (along with several other high 5s she owns), and she meets her trainer for lessons and shows.

Does she owe him commission?

I have known of a trainer who did nothing to sell an AA student’s horse (high 5’s), would not have had the network to do it, but after the sale informed the AA student that they were owed commission. Said it was standard. I think the trainer was insisting on 6% and said it was necessary to continue working with this student. The student could afford it and paid up. But I found that very questionable.

If someone can get someone else to pay them, maybe that is all there is to it.

[OverandOnward]

@fordtraktor

I tried this when I was young and naive. Spent 6 months trying to sell a really nice jumper, nothing. Sent it to the trainer and it was sold in 10 days for 3 times what I was asking. I made MORE money sending it to a pro.

Many pros won’t buy from an amateur, they want to buy from other pros, who then will buy their clients horses from each other, etc.

I know a few amateurs who have tried to get into the buying/selling market with little success. It’s difficult.

This is what it comes down to, really. Connections and networking with the right people - people who will return calls & texts. That is what the commission is for.

People buying in the high-end market are frequently deluged with dreamers trying to sell them something. They cannot answer every one. They are under a constant stream of that kind of noise (a big reason why so many come across as reticent, even aloof, to people they don’t know). Most of them will only deal with someone they see as a proven source of exactly what they are looking for. Horse, house, boat, etc.

[kirbydog]

I would also like to comment that there are plenty of people, pro’s and ammy alike, who want to sell their horse for breathtaking numbers, when the horses true value is significantly less. Consider the lady from the Jumper Conspiracy thread, for example. She’s one of the nuttier ones, but I can’t tell you how many 100k+ horses I have been shown that I wouldn’t touch with a 10’ pole. But I also have a friend that we buy a lot from, and the horses have been, while not inexpensive, less than you might think. And man, did those horses deliver!

[Bristol_Bay]

@Baybear

it seems to me that with social media more sellers / buyers are doing most of the leg work and trainer is just stamping their approval on the purchase.

That’s exactly how it went down when I bought my horse. I saw the listing on FB, called the selling trainer, went down and tried the horse as my own trainer was injured at the time. But she had made many calls on my behalf before this, tried a few local horses. Nothing too time consuming, but she was really networking for a horse for me. Although I gulped writing out the check for her commission, I did it willingly. I knew in advance what the commission would be and appreciated her expertise.

Some on here have opined, well, the trainer didn’t have to work that hard. But you aren’t paying on an hourly basis. Your mechanic might only take 15 minutes to do a job billed at 3 hours labor, but it is the training and the skill you’re paying for.

[fordtraktor]

This exactly. I found my last horse completely on my own through my contacts, and bought sight unseen. I absolutely paid my trainer’s commission because it covers not just the horse I actually bought, it’s the time for the 3 months I sent her links, she sent me links, and we texted/talked about on the other 250 ads for horses that I didn’t actually buy!

FWIW my horse is a gem so it worked out when we sorted through all those others.

[paw]

@mika0116

To someone who indeed does have the ability to purchase a “sport pet” for their teenager at $200k, $60k SHOULD be rather negligible.

No, not really. The way wealthy people stay wealthy is keeping an eye on the bottom line. $60k in commission should make anyone have a second thought. Doesn’t mean it’s not a ciar deal, but it’s worth the consideration.

[mika0116]

Not really to be honest, @paw . Again speaking from experience in the modern world of wealth (where to retire in the US as a two person household you should have about $4m in retirement funds given the current economic climate). Microwealth (under $5m in assets not including primary residence) is perhaps achieved this way, but not levels above that, which I would sincerely hope OP is above considering their willingness to spend $200k on a sport pet for their kid.

I call it $1,000,000 decisions vs $50,000 decisions. Ultra high wealth folks worry about the 7 figure not the 5 figure. $60k is not “worth the effort of nickel and dimeing” as someone who can throw $200k around for a sport pet for kids can easily make up $60k in month or so with passive / minimal effort. Many mid career level Big Tech workers vest RSUs in that range quarterly, post tax in addition to our base salaries of sometimes approaching half a million/year … I am curious how spending patterns will change with the recent spirals of layoffs. Those figures come from a lot of my peers who are now former Meta and Twitter employees.

Folks who are ultra high wealth (which would be someone spending $200k on a kid’s sport pet) don’t need to expend effort on navigating tiny tiny tiny savings like 5 figure decisions. So I believe OP when they say they aren’t super wealthy… hence I am saying … hm do you really need a $200k horse for your kid?

@meupatdoes’s comment exemplifies this perfectly. If you have the skill to generate “that” wealth, it doesn’t take “much relative” effort to generate the $60k that is being squabbled over.

But maybe I’m just coming from a very CPA/ former ibanker, conservative with money tech worker perspective that you shouldn’t throw $200k into a sport pet if $60k in commissions inspires you to ask strangers on the internet questions about it.

Many folks manage their money far less conservatively than I do & I don’t have kids to feel compelled to fund dreams of my offspring, YMMV.

I think as a parent who isn’t "wealthy enough to not care too much about small potatoes of $60k relative to a $200k transaction " - I would not be spending $200k on the kid’s horses.

Feels weird - the tax bracket these folks play in is definitely above the effective 30% rate (sincerely hope generally hitting close to effective 37% rate meaning that most of their annual income is above $539k and taxed at 37%) - aren’t they used to their bonuses, commissions, and other incomes taxed at relative terms and aren’t they comfortable with negotiating contracts to best serve them given the situational industry and general environment. I’d think one stays wealthy by having excellent financial negotiation skills, personally.

[wanderlust]

@mika0116

Folks who are ultra high wealth (which would be someone spending $200k on a kid’s sport pet) don’t need to expend effort on navigating tiny tiny tiny savings like 5 figure decisions. So I believe OP when they say they aren’t super wealthy… hence I am saying … hm do you really need a $200k horse for your kid?

One, for the love of god please stop bragging about how much money you make . We get it. You’ve done well for yourself, as have your friends who worked at tech startups (although may very well be unemployed now). Same goes for your endless condescending pontificating about rich people’s money and how they think about/spend it.

Two, it is not just ultra-high-wealth people who are throwing down on these horses. You are just completely wrong. There are plenty of folks who forego other things so they or their kids can realize their dreams, and those commissions DO add up and put a dent in what they can actually afford to buy. Clearly not what you’d do with your superior income and knowledge, but it happens all the time.

[BigMama1]

@mika0116

Folks who are ultra high wealth (which would be someone spending $200k on a kid’s sport pet) don’t need to expend effort on navigating tiny tiny tiny savings like 5 figure decisions. So I believe OP when they say they aren’t super wealthy… hence I am saying … hm do you really need a $200k horse for your kid?

Based on my limited personal experience I’m going to say not necessarily true for all high net worth individuals. The billionaire I worked for didn’t bat an eyelash at the cost when spending $500,000 for a car, or using his helicopter to get to a doctor appointment that would have been less than an hour’s drive. But if one of us staff went out to buy him some new books or office supplies and forgot to use the 10% discount card? Hoo boy…

[Impractical_Horsewoman]

Also, how often have we taken people to task for not questioning medication, supplement, or show bills? I fully support a self-employed person (a trainer) getting a deserved healthy commission but it’s good practice for a buyer to have the kind of relationship where they can ask questions without the trainer getting bent out of shape. Just because a person can afford to be cheated doesn’t mean they should accept it.

[candyappy]

@Impractical_Horsewoman

Just because a person can afford to be cheated doesn’t mean they should accept it.

I for one feel that @SmilingHorse and others like ( him/ her) are being cheated if they have to pay commission prices like that to their trainers ( buying or selling).

The trainer may have brought the horse along but they have been paid well (I am assuming) in training fees and in boarding and showing costs already.

I have no problem with them being well compensated for their time to find potential buyers and network the horse but people are nuts to think the work is worth that.

[Groom_amp_Taxi]

I am far, far from being a player in this game, but it seems to me that the high % commissions that high end trainers receive are what enables them to live a high end lifestyle - as befits those who provide high end services to the one percenter clients. Even the trainers at the tip top of the industry would have to live pretty ordinary lives if they had to get by on what they make from training and shows.

[Rackonteur]

This. Exactly. It’s beyond tacky when someone willing to pay $200,000 for a horse begrudges their trainer a commission. Tightwads.
Come on, cheapskate OP. Give your son a tiny taste of the real world. Teach him that the people who work for y’all deserve to make decent money too.

I just can’t get over the idea that someone would pay $200,000 for a HORSE.