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Undisclosed commission?!

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  • #41
    Originally posted by PonyPenny View Post

    Buyers never pay a commission when buying a house. The seller pays the commission
    It was an example of work put in, not who pays.
    *****
    You will not rise to the occasion, you will default to your level of training.

    Comment


    • #42
      Please use this often, it is the most important sentence in the horse world:

      WHAT WILL THIS COST ME ?

      I have been around long enough to hear many astonished individuals commenting on a bill they were not expecting.


      Comment


      • #43
        Originally posted by Denali6298 View Post
        BeeHoney isn't it weird though that' the commission bill was months later? I have no grudge against a commission but begrudge the time line. And I'm flummoxed about people saying don't make waves because of the time line
        Yes, it is weird and quite a lapse in professionalism. And certainly a cause for the OP to be annoyed. It is the duty of a trainer (or any business owner) to be up front about costs of any kind. A commission should absolutely be discussed before shopping begins, and amounts should be settled and paid at the time the sale takes place.

        In this case, the OP wishes to continue a professional relationship with this trainer. Many otherwise good trainers missed "Business Skills 101." And personally, I think that to some extent that can be forgivable, as long as in the end charges are overall fair and services are provided. I think that in this case some negotiation would be in order. The OP and the trainer need to agree on a fair total commission. Collecting a 20% total commission on an in house sale is probably excessive and is probably something that both buyer and seller might have raised an eyebrow at at the time of sale.

        The trainer also deserves a rebuke for failing to discuss commission at the time of the sale. As the professional in the relationship, it was her responsibility to disclose her fee. You can't spring surprise charges on people months after a transaction has taken place. Lastly, if the professional wants to charge both parties commissions, the amounts charged to each party MUST be disclosed to the other. In fact, it's possible that the trainer does NOT want to disclose commissions to both parties for a specific reason--perhaps is charging the parties different commissions for some reason and doesn't want to disclose that. That would be an explanation of why she failed to discuss commission at the time of the sale. How likely is it that the OP is going to track down the seller and ask about what commission she paid months after the sale has taken place?

        FWIW, if the OP were not interested in continuing this professional relationship, I do not think this trainer would have any grounds to pursue this fee. Per the OP, the trainer did not have any price lists or any other disclosure of this fee. If this were indeed a "standard fee" it should have been listed in boarding contracts or price lists. The trainer's only leverage is that the OP wishes to continue working with her.

        Comment


        • #44
          Originally posted by Midge View Post

          It was an example of work put in, not who pays.
          At least use an legitimate example.

          Comment


          • #45
            Originally posted by Denali6298 View Post

            How would they know what the bill is without something stating so?
            I have never been billed commission, I just knew 10% was expected, and wrote the cheque. The trainer might have made the false assumption that the client knew the commission policy.
            Freeing worms from cans everywhere!

            Comment


            • #46
              Originally posted by CHT View Post

              I have never been billed commission, I just knew 10% was expected, and wrote the cheque. The trainer might have made the false assumption that the client knew the commission policy.
              one should never assume anything. These days it's best to get any sort of dealing that requires a payment in writing-

              Comment


              • #47
                Originally posted by CHT View Post

                I have never been billed commission, I just knew 10% was expected, and wrote the cheque. The trainer might have made the false assumption that the client knew the commission policy.
                Even if a commission was due, it should be billed for the paper trail. That is just good business practices.

                Comment


                • #48
                  Originally posted by PonyPenny View Post

                  At least use an legitimate example.
                  You do know that buyer's agents in real estate transactions get paid too, right? So regardless of of actual source of the funds, she's getting paid. If I make her traipse through five different houses, contact other agents, look at on line videos of other houses, that all takes time. Then, my neighbor decided to sell her house andI have the realtor give me her two cents on the deal. Wouldn't it be pretty churlish to say, 'you spent five minutes looking at the house I found myself. You don't deserve a commission.'?
                  *****
                  You will not rise to the occasion, you will default to your level of training.

                  Comment


                  • #49
                    OP, if the commission was not outlined in the sales contract, and there was no discussion and the pro (your agent) sent you a bill months later, I think she is SOL. You have no obligation to pay.

                    That said, here's what I'd do from here

                    1. I'd speak to her ASAP and start with the above: There was never any mention of you paying a commission, verbally or in writing, and so you assumed the seller was paying everyone, or that the commission for the buyer's agent was rolled into the price. You didn't ask, because nothing was said to you by the pro and the rest is none of your business.

                    2. Even though you are in the right, you'd like to be a nice guy and compensate the pro/your agent for the time and work she did. Therefore, you are willing to pay her for her time spent on this deal; most of that would go to the time she spent at the PPE and discussing it with you.

                    Start with her hourly rate for lessons and go from there in terms of coming up with a number of hours she could have spent putting together this deal. Be generous in these calculations: you are still paying less than a 10% commission which, frankly, she is not owed.

                    Chances are, she went to the seller with her hand out, got turned down and is now trying to get money from you as a last-ditch effort. It's not your responsibility to make her lack of business savvy right. (She perhaps should have asked you to agree to an agent/client agreement, or at least specified that there would be commission owed by you up front). But in this case, you are being a nice guy by offering *some* solution to her problem.
                    The armchair saddler
                    Politically Pro-Cat

                    Comment


                    • #50
                      Originally posted by Midge View Post
                      The idea that the trainer didn't 'do much' is meaningless. You could have tried five other horses first, then paid a commissionn on the sixth horse your finally bought. Itr just happens that you didn't. Just as in buying a house, if you but the first one your look at, you still owe a commission.

                      My only question would be why she didn't bring up the commission around the time your were writing the checks.
                      That is a speculator's way of doing pricing. I get it, but I don't do it when helping clients buy.

                      Instead, I charge a straight hourly fee. That way, I get paid no matter what for work I actually did. I try not to get into the business of finding the horses (that takes lots of time and it can seem to folks that it doesn't take real time). But I'll watch any videos they send me and give an opinion. If the horse is worth going to see, I charge for that. Lots of times, my clients have to see a lot of frogs before they appreciate and buy the eventual prince. I'm not betting on their finding the right horse (and/or not changing their mind or somehow buying without me in which case I get nothing... and maybe a horse I can't improve for them). Rather, I can accept whatever they end up buying or not because I already have been paid for actual work done.

                      A few other reasons to do this rather than do commissions:

                      1. I get paid whether the horse they buy is cheap or expensive. As often as not, I'm ahead if my client is clueless (and so will ask me to look at a lot of horses) and wants a cheap one.

                      2. I get to start out on the right foot in terms of professionalism and transparency with clients: I explain how I do it, why I do it in this wildly unregulated industry (and I emphasize that the commission thing is a mess, so for future reference, they should know that they need to ask others about who pays commissions and what those cost; they can be a larger percentage for cheaper horses). I want my clients to appreciate my business-like way of going about things. I also emphasize that I have been in their shoes much longer than I have been in the trainer's shoes and I treat clients the way I want to be treated as a paying client.

                      3. I like educating clients and I want to be paid for that. Buying a horse is a huge learning opportunity. I want to help clients with that learning, not buying the perfect horse per se. If we are doing it right, the horses we see get better and better, and the client gets better at weeding through videos before they ever have to pay me to come ride one with them. I want my clients to pay me for education only.... not contacts or whatever else, because, at the end of the day, education of horse and rider is the specific service I am selling them.

                      4. I encourage them to attend the PPE. I do too, and I want to be paid for that. They need to know that the DVM has his form of expertise and I have mine. They need to pay for both. And, at the end of the day, it's their purchase, so they need to be substantively involved. They should see the flexions themselves, see the rads taken and bits of those pictures identified and discussed. They should be part of the substantive decision to take more views or not. Again, this process helps set the precedent for how I will work for them as their trainer, and it empowers them as the buck-stopper owner who, nevertheless, needs to pay for expertise that they don't have alone. But often they will see me ask the vet deeper questions than they would have thought to ask... and in those instances, they should realize why it was worth paying me to attend the PPE.

                      I just hate reading about situations like this and it frustrates me to no end that professional horse trainers aren't professional business people. So I'm trying to be the change I want to see.
                      The armchair saddler
                      Politically Pro-Cat

                      Comment


                      • #51
                        Originally posted by mvp View Post
                        Chances are, she went to the seller with her hand out, got turned down and is now trying to get money from you as a last-ditch effort. It's not your responsibility to make her lack of business savvy right. (She perhaps should have asked you to agree to an agent/client agreement, or at least specified that there would be commission owed by you up front). But in this case, you are being a nice guy by offering *some* solution to her problem.
                        Kind of makes me wonder why seller left... (It could be completely unrelated to horses or this sale in particular, but if trainer has tendency of being disorganized or unprofessional or late billing, I would be much more inclined to get a written contract stating rates and commissions -- especially if OP were to sell this horse or buy another one.)

                        As for OP paying commission or not, I think it comes down to how much she wants to stay in training with this trainer. And stuff out of her control, like how much trainer is willing to negotiate her fee, and how much she wants to keep OP as a happy client. I don't knock OP for wanting to stay; I've trained with someone who was great teacher and terrible businessperson (yet, or because of this, her training fees were also lower than some trainers who were great at business and maybe not so great at teaching). But it does depend on how much of this you want to put up with, and if having awkward conversations is another price you don't mind paying (I would not necessarily count on trainer/other people to change or behave more professionally, if this is how she is and still manages to have clients).

                        Comment


                        • #52
                          Originally posted by Midge View Post

                          You do know that buyer's agents in real estate transactions get paid too, right? So regardless of of actual source of the funds, she's getting paid. If I make her traipse through five different houses, contact other agents, look at on line videos of other houses, that all takes time. Then, my neighbor decided to sell her house andI have the realtor give me her two cents on the deal. Wouldn't it be pretty churlish to say, 'you spent five minutes looking at the house I found myself. You don't deserve a commission.'?
                          Yes, I know that. I am not stupid and have bought and sold several houses. In California, the normal 6% commission is paid by the seller and is split between the buyers and sellers brokers with a portion to the agents. On a $600,000 house, the commission is 6% or $36,000. $18,000 to each broker. It is all detailed out in the escrow documents and is paid at the close of escrow from the sellers proceeds. The buyer does not get a separate bill from their agent. If horse sales were conducted the same way, the commission whether it be 10%, 15% or 20%, would be paid by the seller and be split between both agents. All of it detailed in the bill of sale.

                          Comment


                          • #53
                            Originally posted by PonyPenny View Post

                            Yes, I know that. I am not stupid and have bought and sold several houses. In California, the normal 6% commission is paid by the seller and is split between the buyers and sellers brokers with a portion to the agents. On a $600,000 house, the commission is 6% or $36,000. $18,000 to each broker. It is all detailed out in the escrow documents and is paid at the close of escrow from the sellers proceeds. The buyer does not get a separate bill from their agent. If horse sales were conducted the same way, the commission whether it be 10%, 15% or 20%, would be paid by the seller and be split between both agents. All of it detailed in the bill of sale.
                            Of course you know that. Because Real Estate is regulated, yo.

                            Srsly, ppl:

                            So much would be improved about Horsing if we would accept some regulation of these transactions. And when horses start costing as much as houses, I don't see why the people writing checks that big don't insist upon it.
                            The armchair saddler
                            Politically Pro-Cat

                            Comment


                            • #54
                              I have never heard of only seller paying the commission (except in real estate). Buyer and seller pay their respective trainers whatever commission has been agreed upon in advance. Not sure what to make of the fact that buyer did not know policy - you should always ask but trainer should have made sure buyer knew rate as well. I would have a discussion but you probably have to pay if you want to keep the peace.

                              Comment


                              • #55
                                Originally posted by Bunker View Post
                                I have never heard of only seller paying the commission (except in real estate). Buyer and seller pay their respective trainers whatever commission has been agreed upon in advance. Not sure what to make of the fact that buyer did not know policy - you should always ask but trainer should have made sure buyer knew rate as well. I would have a discussion but you probably have to pay if you want to keep the peace.
                                With all due respect, I don't think the OP, an ammy, I think, and an example of a consumer in this unregulated industry should be paying to make up for the professional's lack of clarity up front. The pro made the mistake of not discussing her desired commission up front and, therefore, gets to consider this loss "tuition" for a lesson learned. And know, too, that if this were regulated (like real estate) the most clueless professional would be protected by that. But if you want to work in an unregulated industry, it's up to you to make sure you do business with people the way you want to. You can tell that I think ti's a bad precedent (for the OP in her local relationship with this pro) and at large to have the client just bend over and pay trainers or agents for bad business practices. The wrong person is paying tuition and the right person gets no schooling.
                                The armchair saddler
                                Politically Pro-Cat

                                Comment


                                • #56
                                  Originally posted by mvp View Post

                                  With all due respect, I don't think the OP, an ammy, I think, and an example of a consumer in this unregulated industry should be paying to make up for the professional's lack of clarity up front. The pro made the mistake of not discussing her desired commission up front and, therefore, gets to consider this loss "tuition" for a lesson learned. And know, too, that if this were regulated (like real estate) the most clueless professional would be protected by that. But if you want to work in an unregulated industry, it's up to you to make sure you do business with people the way you want to. You can tell that I think ti's a bad precedent (for the OP in her local relationship with this pro) and at large to have the client just bend over and pay trainers or agents for bad business practices. The wrong person is paying tuition and the right person gets no schooling.
                                  I agree with all this. I can see how an enexperienced buyer would not know to ask about a commission. "Our" industry is notorious for crazy / unethical practices. I agree that the wrong person is paying the tuition but not sure how to get around the situation if they want to stay with current trainer.

                                  Comment


                                  • #57
                                    Originally posted by Bunker View Post

                                    I agree with all this. I can see how an enexperienced buyer would not know to ask about a commission. "Our" industry is notorious for crazy / unethical practices. I agree that the wrong person is paying the tuition but not sure how to get around the situation if they want to stay with current trainer.
                                    I proposed a solution up above. Trainer gets paid for the work she did, after a (rather educational) conversation. To me, this helps put the relationship on a better/clearer footing than it was when this all went down. If I were doing business with someone, I'd want that kind of clarity going forward.
                                    The armchair saddler
                                    Politically Pro-Cat

                                    Comment


                                    • #58
                                      Originally posted by BeeHoney View Post
                                      Is it reasonable for a trainer to collect a total 20% commission on an in house sale? That seems really steep to me.
                                      The way I read the original post we do not know that there is a 20% commission, it is assumed by the OP.

                                      Originally posted by PNWhunter92 View Post
                                      I would also presume that she is asking the seller for commission as well, so trainer is walking away with a hefty 20% on a mid 5 figure purchase for doing what was in my opinion very little work.?

                                      Comment


                                      • #59
                                        Originally posted by trubandloki View Post

                                        The way I read the original post we do not know that there is a 20% commission, it is assumed by the OP.


                                        Yes, very true. However, as soon as the OP pays (or agrees to pay) a commission to her trainer she has the right to know the exact details of any/all commissions the trainer received on this sale. This is because when someone is your agent in any transaction, you have a right to know about any and all conflicts of interest.

                                        I think that when the OP asks this question, it is going to open a can of worms. If the trainer admits that she's taking 10% from both parties, that's a very steep commission on an in house sale. If the trainer admits that she charged the seller less (say 5%) the OP will wonder why the trainer gave a preferential discounted rate to the seller when it sounds like she did more work for the seller. That really doesn't make the trainer look like an equitable and reasonable person.

                                        And if the trainer says she didn't charge the seller anything and she was solely working as a buyers agent for the OP...well, that would come across very strangely since again, it sounds like she did the majority of her work for the seller, and it would lead me to question her honesty.

                                        And of course, after a sale has been completed, it's really very difficult to confirm anything. While it would be very normal and reasonable to request that commissions be listed in a sales contract, I'm not sure it is as easy to approach the previous owner of the horse to confirm months after the sale has taken place. With that in mind, another option for the OP would be to say that she happy to pay a 10% commission as soon as she is given an updated (corrected) sales contract with all commissions listed and signed by all parties including the seller. But, that otherwise she is happy to be billed for all time and expenses the trainer expended on her behalf with regards to the sale (as per mvp's advice).

                                        Comment


                                        • #60
                                          Op, i really hope you feel comfortable to report back to us the outcome of your situation!

                                          I think. Mvp and BeeHoney have suggested great strategies to make this work out for you.

                                          Good luck!

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