Seller/Buyer/Broker Commissions-How does it work

[da]

Can anyone clarify who gets what and when? Thanks!!

[moonrize]

First of all everything should be up front and hopefully in writing. Then it depends on whether you're the buyer, seller, or broker. I consider trainers looking for horses for clients to be brokers. The seller gets their selling price up front. If the broker has contacted the seller beforehand and talks to them about bringing clients, a fee from the seller to the broker can be negotiated. Also, the client usually pays either a flat fee or a percentage to the broker for finding a horse. The buyer gets stuck with all the bills LOL.

[da]

thanks sally.

[stella]

If a buyer hires a broker, then thats a separate deal.
The job of a buyer's broker is to thoroughly search out, screen(evaluations), and present (often going with the client)any and all horses "passing" the screening(a pro generally knows what questions to ask, who to ask for pix/ video,etc. and narrows down prospects based on knowing his clients' needs,requirements and capabilities..and of course, gait!).
A buyer's broker is being paid for their expertise, expenses(such as phone/gas/wear-tear on whatever equipment used) and TIME spent in doing preliminary screenings.
So, there should be some agreement as to amount(which may be a %,or not)between the buyer and agent...this is best done separate, so that the buyer's agent screens ALL available prospects, regardless if they're represented by a seller's agent or not,remaining objective in the process.

A seller's agent is working for the seller - yes, they also want to make a good match,but they will promote the horses for which they have agreements with the sellers first. It should be a "separate entity."
If a buyer approaches a pro, they should ask if that person is representing any horses that might fit their bill, so that those possibilities are exhausted first, with the seller paying the commission....and if not, then either go to other agents, OR, THEN propose that whichever agent they felt most comfortable with, become their buyer's agent.....ultimately, its the buyer that should make the final buying decision.

In view of these being separate interests, the answers to the scenarios would be:

1. The buyer pays his broker, and the seller pays his broker.

2. The buyer pays his broker. The seller got paid for his horse by the buyer, at whatever price the broker was able to negotiate on behalf of the buyer.

3. If the broker is the one who found the horse for the buyer, the buyer cannot circumvent paying the commission by cutting the broker out of the final negotiations....the broker's main job is to get a buyer and seller together...the final details are secondary-in fact, many brokers allow the buyer and seller to work this last part out, particularly buyer's agents, or if the seller's agent doesnt have the horse on consignment, so the horse is on the seller's property.
Regardless, if the agent found the horse for the buyer, he should be paid whatever commission was agreed upon.
10% is standard, esp seller's agent. Buyer's agent really depends on price range, purpose, if the agent is going with the buyer, going "pre" buyer to test and then come back with client, etc! That's very variable(if travel is involved, those expenses are separate)Hope this helps.

[motorgypsy]

We've used brokers quite extensively when buying horses. The reason we like them is because since they are in the selling business they are generally very much more up front about the horse since repeat business keeps them in business. I do prefer a smaller broker who also owns personal horses. They also know the name of the horse's owner and usually trainer so you can contact the owner and trainer individually before you buy. In our case the owner paid the broker out of the final purchase price. The amount varied since at times we have had brokers reduce their fee to give us a break.

[Carol Nelson]

I broker horses on a small scale simply because I'm the only Paso Fino breeder and seller in a 150 mile radius. I charge a commission based on how much work I do to sell the horse. If it's close to me in distance, I go out to the farm and photograph and video the horse, and then list it on my website. I will also take prospective buyers out to the ranch to view and perhaps ride the horse. If it's not close enough to do that I simply give the phone number of the owner of the horse and let the prospective buyer call them. Then I usually don't charge a commission. If the seller choses to send me a gratuity, it is much appreciated. As I said, it all depends on how much work I did on my end.
The commission is taken out of the amount the horse sells for. The seller pays me the commission.
I think some of you have heard me say that I once got my commission paid in chickens. Believe me, at the time, those chickens were needed! :)