Lease and Trainer Commission

[trubandloki]

@2DogsFarm

Sorry, unless you’re agreeing w/me that it’s usury, Pros need to realize there are adult clients perfectly capable of buying or even (horror!) selling a horse unaided.
Skimming off both ends is greedy.
Browbeating clients into treating the trainer as the only one capable of finding a suitable horse is

Many trainers (clearly not all) have a standard for their showing clients and if you want to represent that trainer at a show, you need to be riding a horse that represent that trainer well.

Add that no trainer wants a client who buys a fully unsuitable horse and then has to deal with the social media pummeling from the annoyed client when Dobbin is not winning everything and it must be the trainer’s fault because clearly Dobbin is perfect in every way.

I realize there are some very competent adult owners out there, but there are just as many, if not more, adult owners who gleefully buy things that are not appropriate for their stated goals.

[2DogsFarm]

Agreed.
But perhaps Pros need to assess the client before slapping a blanket charge on any transaction.
I’ve seen both ways:
Client buys unsuitable horse, trainer has to work with what they’ve got unless client can be talked into an upgrade.
I’ve seen that go very bad.
Timid client had a little App hony she loved.
Unsuitable for trainer’s idea of suitable for Hunters.
Talked client into an upgrade: small TB mare with 'tude.
Watched mare come in off the longe, ears flat, at the client.
Eventually she had a bad spill off mare, in the home barn indoor. So bad EMTs had to cut off her boot off a badly broken leg.
Shame on Pro for selling what she needed, not considering the client.
Same trainer had a Deep Pockets client with a meh OTTB. Once found trainer in tears at a show, because she had to try to make this sow’s ear into a Hunter silk purse.
Talked. client into selling & buying locally known $40K horse < this was mid-90s, so that was a respectable upgrade.
Friend showed horse & said it was like driving a car to the jumps.
Client turned horse into a stopper by floating his teeth Over.Every.Fence!
Both deals included commissions for this Pro, both ended badly.
OTOH (Humble Brag):
The TB (never raced) I bought from this trainer as a 6yo ended up AA Reserve Hunter our 1st season & local BNT offered 10X his purchase price 3yrs later. Pro rides didn’t happen, I lessoned twice a week & showed infrequently.
Footnote:
Knowing how trainer skimmed, I offered to buy at a 25% low-ball. Accepted, so trainer probably gave up at least part of her end of commission.
That, or the selling price had been inflated to me

[trubandloki]

I think (just my thoughts) what happens is, a trainer charges for everything because then there is no situations where Suzy pays but Jill does not. There is no client saying - but we bought the first horse we looked at so why do I have to pay the full commission.
It is very black and white. All sales and leases pay the commission.
The trainer does not have to sit down and explain that keeping this lease horse in the barn involved three phone calls to the owner and paying a lawyer to look at a contract. Just all sales and leases pay.

[Bogie]

IMO, there is a real issue with transparency in the industry. Trainers should be more up front with what their expectations are so that clients can make decisions, rather than be surprised after the fact.

I’ve seen both sides of the equation – people who shopped without their trainer and ended up with horses that were not suitable – some did not have the scope for the job but were pretty, some were not completely sound – and people who worked through their trainers and ended up with horses that were unsuitable – usually horses that need regular pro rides to keep them going. Or people who discovered the trainer was double dipping or who had inflated the price of the horse they bought.

Typically, I’ve asked my trainers to review videos, watch me ride a horse, etc. but have negotiated a price with them up front based on time spent vs. commission on purchase price. Not every trainer will do that. I also have always paid the owner of the horse, not the trainer so that at least the two of us agreed on the horse’s real purchase price.

[HJdaydream]

Unpopular opinion- I am in the H/J world and have no problem with the commissions that trainers charge. Like @trubandloki said, it’s very black and white, which I prefer.

I look at it this way: board/training is a set fee every month. There is no place to skimp/save. It’s a core fee that must be paid for horse ownership. Leasing/buying a new horse is an option, and you can set your own budget (which should include the cost of commission). We all know trainers aren’t getting rich off of boarding, so they have to make money to stay afloat somewhere. I’d prefer that fee come from those with money to spare while shopping for new horses, versus raising the cost of board for the whole barn.

And yes, this is coming from someone who recently bought a new horse and paid the commission, which was nothing to laugh at.

[touchstone]

This is normal, but regrettable.

I find our industry’s commission practices to be unfortunate in general. But even the arguments normally made to justify them really fall apart in this situation.

I would prefer to live in a world where trainers billed their clients in a manner sufficient to earn a living wage, then charged for their time when it came to helping clients buy or sell. The incentives would be so much better, and trainers would not have to live hand to mouth when their clients were not actively transacting.

But, given that is not the world we live in, I would not advise the OP to fight too hard over this.

[HJdaydream]

@touchstone

I would prefer to live in a world where trainers billed their clients in a manner sufficient to earn a living wage, then charged for their time when it came to helping clients buy or sell.

This sounds good in theory, but really think about what you’re asking here…
In general, we can all agree that the cost of having horses is getting prohibitively expensive for most. The 1% can still buy new horses routinely, but most of us “working ammies” have one horse that we keep for many years. So, you pay one commission every however many years, and you pay your board every month.

Sally Smith, a rider in your barn, has 3 horses that are always rotating. She buys or leases 2-3 6 figure horses a year. The commission is not a problem for her. She is essentially subsidizing the cost of your own board. Your trainer can keep the board low for everyone else, but still have the funds to make repairs and keep the program running. If you have had the same horse for the past 8 years, you are happy the board rate stays low, even though your trainer doesn’t really profit from it.

If the commission structure went away your board rate might double or more. Sally Smith wouldn’t care, but that would make the cost of horse ownership prohibitively expensive for you. Personally, I’d rather keep the the commission structure, and will happily pay it when I’m in a place to horse shop again.

[BAC]

I had a trainer like you but they are few and far between. In fact when one of her clients ran into serious legal and financial trouble after she had spent considerable time on a horse search for the daughter, she told the parents they didn’t owe her anything for her time!

[touchstone]

@HJdaydream

If the commission structure went away your board rate might double or more. Sally Smith wouldn’t care, but that would make the cost of horse ownership prohibitively expensive for you. Personally, I’d rather keep the the commission structure, and will happily pay it when I’m in a place to horse shop again.

I understand the point you’re making, but I just disagree. First of all, I don’t think Sally Smith and penny pinching Working Ammy are at the same barn anyway. I do understand that paying my trainer fees that actually supported their cost structure and quality of life would probably mean paying higher fees. I am ok with that, and would find a program I could afford in such a world. I don’t think anyone should have to work for free, certainly not someone who is working as hard as the typical pro.

But there are SO MANY problems with the typical commission structure that I think are really unfair and toxic to our industry. It creates undue pressure to constantly transact. It creates insane incentives to encourage customers to overpay for horses and to avoid shopping for Working Ammy with a limited budget. It encourages trainers to continually source from the same small pool of close associates. It also sometimes makes it financially prohibitive for Working Ammy to get out of a horse that’s not really working for them and into a similar value horse that is a better match. (Add up commissions on both transactions, and you lose 20-30% of your horse’s value even if the buy and sell price match exactly.)

I do think effectively shopping for customer horses and negotiating deals is often hard work. It requires time, a strong network, good judgement, and a lot of expertise. I would just rather pay for those services on an hourly basis, the way I do for lessons and horse show training.

[trubandloki]

@touchstone

I don’t think Sally Smith and penny pinching Working Ammy are at the same barn anyway.

You are so wrong on that front.

When I was actually showing hunters (one or two shows a year, not travelling) I had to clean stalls to support my board, etc. I was penny pinching working ammy (full time other job, cleaning stalls, etc).
There was more than one person there with more than one horse that travelled to lots of shows, etc.

[findeight]

@2DogsFarm

That, or the selling price had been inflated to me

Nah, BOTH.

[HJdaydream]

@touchstone

But there are SO MANY problems with the typical commission structure that I think are really unfair and toxic to our industry. It creates undue pressure to constantly transact. It creates insane incentives to encourage customers to overpay for horses and to avoid shopping for Working Ammy with a limited budget. It encourages trainers to continually source from the same small pool of close associates. It also sometimes makes it financially prohibitive for Working Ammy to get out of a horse that’s not really working for them and into a similar value horse that is a better match. (Add up commissions on both transactions, and you lose 20-30% of your horse’s value even if the buy and sell price match exactly.)

These are some really good points, that I also agree with. I think I’m very lucky to be in a barn where the penny pinchers and the Sally Smith’s get the same amount of attention and care. Everyone shopping for a horse, no matter the budget, get’s the same treatment. I can absolutely see how the system could encourage those problems you mentioned though.

P.S. It is very refreshing to have a conversation with various viewpoints and no one is flying off the handle. Loving the calm and constructive discourse!

[foursocks]

I bought both of my current horses (several years apart) through the same person (Martin Videla), down in Argentina. There the seller pays commission to the finder, so even though in both cases he helped me find suitable horses, had me try them the first time, when I was able to go to Argentina, and in the second case sent me endless videos of horses for sale that he thought might suit me, set up the vetting for me, steered me to the right people to get them both imported, and so on, his commission (10%, which I believe is the norm down there), came entirely from the seller side.

It turned out that, although I looked at many, many other sellers’ horses, in both cases I bought from Martin. The first horse was from his Rancho Pampa operation, the second he co-owned with someone else, so he took whatever commission out of the transaction he was owed, both times. Everything was 100% transparent, and even if I had bought from a different seller it would have been exactly the same- I paid zero commission, and the horses’ prices were all known by everyone up front, and whatever padding went on it was worked into those prices (which were very, VERY fair).

On my side of things I worked with my two trainers who looked at the videos of my top choices and gave me their professional opinion. They were both eventers and also friends, and things are a bit different in that world than H/J-land. When I asked what I owed them for this help the answer from both was “Nothing.” From their perspective I was a client who was now bringing in another horse, which equalled more training and more lessons and so on. Somehow this model seems to work just fine, so I would argue that it doesn’t have to be the way it is in H/J-land.

I grew up in A show H/J-land, so I learned early on about commissions from our experiences buying three junior hunters- the lack of transparency and the gouging in this process sucked then, and it sucks now. I compete in the jumpers still but this sort of practice is one reason I no longer board or train with a “normal” H/J show barn.

[skydy]

In some States, dual agency (representing buyer and seller and taking a commission from both) is illegal. I have no idea if those laws apply to private sales vs public auction but if not, it should be.

Jess Jackson was primarily responsible for bring the practice to light and getting that law passed in Kentucky when he noticed it happening at the high end TB sales.

Taking a commission is to be expected, but not from both parties in a transaction.

[trakehners]

@foursocks

They were both eventers and also friends, and things are a bit different in that world than H/J-land. When I asked what I owed them for this help the answer from both was “Nothing.” From their perspective I was a client who was now bringing in another horse, which equalled more training and more lessons and so on.

This is basically how my trainer operates (as an eventer)—she requires that she be involved in purchases because she doesn’t want horses that are a terrible match for their people in the barn, but it’s definitely not a H/J-style commission model. Her lessons are also technically priced lower than they “should” be, but, as she says, keeping them priced that way means everyone in the barn is taking at least 1-2 lessons per week pretty much all the time (unless we are and/or our horse is hurt, most of us usually pay for training rides if we’re out of town for more than a couple of days). Her income is way more reliable and she has better eyes on her people because we can all afford to be in the ring with her every week.

I am, however, weird in that I don’t have my horse in even partial training with her (unlike most of the barn, mostly because of people’s schedules) because we both agreed that it won’t do me any good to ride less

[findeight]

@skydy

have no idea if those laws apply to private sales vs public auction

My understanding of that is it applies to both but also that proving it is difficult when so much is not in writing.

I bought through trainer/agents several times and insisted in paying seller agreed upon price directly and paying my trainer/agent agreed upon commission directly. That is one way you can protect yourself. Everything in writing too. No handshake, no my trainer is my friend and would never cheat me BS.

Leases can get muddy as far as actual owner and who gets what cut but specifics contracts help.

[skydy]

That is a very good business practice on your part.

[findeight]

Well, strikes me that shady sales practices continue because we let it continue. Speak up, know who the actual seller is and pay them directly, know what your trainer wants for commission and pay them directly. And read your boarding/training contract carefully when moving in and every year when you renew, ask questions if you do not understand…remember it is their business and they can set whatever rules they want so don’t assume anything.

Unfortunately there is still room to get screwed by shady practices but keeping the light on them minimizes the damage.

[Demerara_Stables]

@HJdaydream

Sally Smith, a rider in your barn, has 3 horses that are always rotating. She buys or leases 2-3 6 figure horses a year. The commission is not a problem for her. She is essentially subsidizing the cost of your own board.

What happens to barns/trainers that don’t have a Sally Smith or Sally has one really good, sound horse, and isn’t buying regularly? The trainer must charge everyone the same amount and expect to make the same off of everyone (provided the amount of work into every horse/client is the same). No one should be subsidizing anyone else.

[Demerara_Stables]

@2DogsFarm

Sorry, unless you’re agreeing w/me that it’s usury, Pros need to realize there are adult clients perfectly capable of buying or even (horror!) selling a horse unaided.
Skimming off both ends is greedy.
Browbeating clients into treating the trainer as the only one capable of finding a suitable horse is

This.

I always approve any horse (and client! ) that comes into my program. If it’s a new client, we have a frank conversation about the horse’s abilities and the client’s goals BEFORE I take them on. If the client wants to shop on their own, I charge for my time to evaluate said horse and communicate with vet about the PPE. I do not communicate with the seller at all. If client loves Dobbin and really wants to buy him but he won’t be a good fit for the client’s goals or my program, I send them on to a different program that is a better fit. No hard feelings, and no worrying about buying the wrong horse.

I’ve turned away quite a few people over the past few years, and also parted ways with a few that weren’t a good fit any longer. It makes my existing client base way stronger and practically eliminates stress from bad client relationships.