Commission when buying a horse?? Who pays and what's the going rate?

Question

I recently sold my horse through my trainer. I paid her a 10% commission for selling him. Now I am looking to buy another horse and I'm using the same trainer. I know in Real Estate, the seller pays the commission. Is it the same in the horse industry, or will I the buyer have to pay another commission? It just seems like the agent would benefit from me buying a higher priced horse and I don't see why I should pay a commission when she's doing the seller the favors and not me. Also, what is a reasonable rate?

Answer 1

There is no legal rule like there is in real estate, but there are "general" practices....



Commissions are usually 10 - 15% and they usually have a minimum (such as $500 or $1000). Usually all commissions are paid by the seller, but sometimes the seller simply raises the price of the horse to cover commissions. Also, many times people other than trainers get commissions. Here are some examples.



Seller A is selling their horse themselves and are asking $5000. Your trainer calls them and explains about her commission. The buyer may say OK and sell you the horse for $5K and pay your trainer $500, or she may say to make the price $5500 so she gets her $5K and your trainer still gets her commission.



Seller B trains at farm C and the farm has the horse for sale. Your trainer calls them and is told the price is $10,000. If you buy the horse your trainer would make a $1000 commission, the farm would make a $1000 commission and the seller would get $8000.



Seller D has a horse for sale and wants to get $10,000. Your trainer calls her friend "Betty" who knows trainer F. Trainer F is the instructor for Seller D. Trainer F may say the horse is available for $15,000 which would cover the $10,000 to the seller, a $1000 commission to your trainer, a $1000 commission to "Betty" and a $1000 commission to herself and still have $2,000 of 'negotiation room'....



Those are some different ways it can work - the point is each situation is different and it's hard for the buyer to ever find out how much of the purchase price is actually going to the seller and how much is commissions.



Assuming that you have a very honest and up-front trainer you should be fine... explain your thoughts and be sure she explains to you how the process will work, how she will get her commission and how much her commission will be. She definetly deserves to make money when she helps you buy a horse. It's hard work - she has to make TONS of phone calls to all of her contacts and advertisements she sees, she may even go look at some horses without you to see if they are worth taking you to. It doesn't sound like a lot but trust me - it is... I've had buyers who take MONTHS to pick a horse and during that time I've spent HUNDREDS of hours working to find them something, and in the end I only make a few hundred dollars....



Your trainer should not only help you find the horse, but will then handle the negotiations, shipping, vet checks, more negotiations, etc... And then she has to work to be sure you are happy with your horse even after you buy - so you keep training with her.



I hope this helps you, remember: talk to your trainer, be honest and up front, and then expect the same from her.



Good Luck! :)

Answer 2

You can work this out in the fine print when you buy the horse. Often the seller will be paying their trainer a commission as well, so they expect you, the buyer, to be responsible for your trainer's commission. If you want the seller to pay your end of the commision as well, they will often tack it on to the price of the horse. Anything in the 10-20% range is fair. 10% is a good rate for a high dollar horse. 15% for mid-range prices, and 20% for the cheaper horses. It insures that the trainer is getting a proper amount of money for the work they have done.

Answer 3

If you contract your trainer to sell a horse for you, 10% is fair for both. If you find a horse yourself and want a professional opioion from your trainer, that is another situation where you can offer to pay a set fee, say $150 for an honest evaluation...you are still dealing with the seller of the horse, the trainer is only for evaluation purposes. However, if you ask your trainer to find you another horse, you need to agree on a finder's/evaluation fee up front, as your trainer's time is valuable. Remember, you will still need to pay a vet for a physical evaluation, so remember that when you are contracting your trainer.

Answer 4

If your trainer sells a horse for you they get 10% here in Iowa. If you found a buyer yourself you would not have to pay commission to the trainer. Buying a horse you don't have to pay commission to the trainer unless they find the horse for you. Yes, perfectly normal.

Answer 5

I usually see the 10% commission too. In reality, the buyer always pays the commission, no matter what the contract says. The seller just adds the commission he expects to pay to the purchase price.

Answer 6

skttl969 has earned a best answer, IMO, but I'd like to add something to her excellent explanation.



Commissions and skullduggery in buying and selling horses can be a real issue. Most trainers are honest and ethical, but there are some who are not and that's where you as a buyer have to be aware.



If you are buying a horse and a trainer is acting as agent in the purchase, here are some questions you MUST get answers for:



Who actually owns the horse? If the trainer who is representing you in the purchase of the horse, or the trainer who is representing the seller, won't tell you who actually owns the horse, walk away from the deal. Ask the trainer representing you if they have an ownership interest in the horse, or if the seller's agent has an ownership interest in the horse.



Can I talk to the seller directly? I know some trainers don't like clients doing this and some sellers prefer not to be involved in the transaction, but this is one issue I would not be flexible on: I want to talk to the person who actually owns the horse, who will be getting my money if I am buying the horse. If I can't do that, no deal.



How many people in this transaction will be getting a commission on the sale of the horse? Trainers make part of their living collecting commissions on the sale of horses. If Trainer Tina asks Trainer Charlie if Charlie has a horse, and Trainer Charlie asks Trainer Robert, and Robert has a horse, it's likely that Trainer Charlie and Trainer Robert are getting commissions on the transaction, as well as Trainer Tina. Ask your trainer who is getting paid a commission on the transaction. (In an ethical world, Tina would split whatever commission she's getting from her client with Charlie and Robert. But it isn't an ethical world, and the 10% or so that Tina is getting from the client isn't very much when it has to be split 3 ways. In an unethical world, Tina will increase the price she charges the client for the horse to cover whatever Charlie and Robert are getting as commissions. Client pays.)



If a trainer is representing you in the purchase of a horse, and you are paying the trainer a commission on the transaction, by law in many states the trainer is required to disclose to you if they are receiving any remuneration from the seller on the transaction. When a single agent receives payment from both buyer and seller on a transaction, this is called dual agency. It isn't necessarily illegal for someone to represent both parties in a transaction, but it sure as hell is unethical for them to fail to disclose that, and in some states it is illegal to fail to disclose dual agency. But there are trainers out there who will pocket money from both the buyer and the seller and will just keep quiet about it, figuring that what the client doesn't know won't hurt her. Dual agency is a situation that is absolutely ripe for conflict of interest.



Last warning: if you are buying a horse and the trainer representing you in the transaction tells you, when you go to close the deal, to make the check out to anyone other than the person who owns the horse you are buying, be very, very cautious in proceeding. I would go so far as to say that you should walk away from the transaction. My preference is to hand the check directly to the seller and receive the bill of sale directly from them. Make sure that the bill of sale you receives specifies the price you paid for the horse. (If the bill of sale is handed to me by anyone other than the owner of the horse, my preference would be to call the owner and make sure that the amount I paid for the horse is the amount they sold the horse for.)



I hate to sound so suspicious, but it's my experience that there are trainers out there who regard trusting clients as little woolly lambs, ripe for fleecing, and who will not behave ethically. Protect yourself in a transaction and make sure you and any trainer who is acting as your agent are very, very clear about who is receiving a commission, how much that commission is, and who the commission is coming from. If you have the slightest suspicion that someone acting as an agent is not being complete transparent and honest about the transaction, keep your hand on your checkbook and your eyes wide open, and walk away.

Answer 7

in most cases, the sellor pays the commission.

the buyers agent/trainer does the work as far as locating suitable animals and going with the client to evaluate the horse. dont let her send you out there to do her work for her!

she locates the horse, she tells the sellor what her commssion is , a sales price is negoaiated, which includes her commsssion. she is payed by the sellor. whatever she needs to do as far as paperwork to secure her commssion from the sellor is up to her.

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on the other hand lets say you go from barn to barn and look at the horses. lets say you find one, try it out and then have your trainer come for the final look-see, before the vetting. then you pay your trainer an evaluation fee, regardless of what you negoiate the sales price to be. the trainer only evaluates the horse and gives an opinion on the sales price. her evaluation fee should not be dependant on the sales price. talk to her and iron all this out BEFORE you start looking at horses.

if she finds a horse, she needs to work out her commssion rate with the sellor.

if you find the horse you pay her a flat fee to evaluate. it should be about $150, for her to look at the horse and evaluate it, and help you make a decision based on the findings of the vetting.

it would be a good idea for yu to put all this in writing so you are not stuck paying her a commission on a horse she did little to help find.

Answer 8

My trainer charges 10% of the selling price when I sell through her and 10% of the purchase price when she finds me a horse. I pay her for her services for helping me.

Answer 9

Horse Finders