Brokerage

A brokerage is a firm that acts as an intermediary between a buyer and a seller.  To broker a deal is to communicate with both parties, bringing them together in agreement on the terms of the contract.  A broker, a single person, or the firm completes necessary paperwork, obtains appropriate signatures and at times, monitors the execution of the contract from fulfilment through to payment.  Since the buyer and seller are employing the brokerage to complete the deal, it may collect a portion of the money as its fees, commonly referred to as commission.  In some cases, a firm receives commission from both parties, while in others, it receives a commission only from the seller.

Brokerage firms are most commonly thought of in relationship to the sale and purchase of stock shares. Their fees are variable, depending on the degree to which the firm is involved in decisions about purchase.  Some stockowners give their brokers power of attorney to make decisions about when to buy or sell stock and depend upon them for researching new stock for purchase.  This type usually assesses a fairly large fee and regardless of whether the owner loses or earns money, the firm is paid.