Greetings to my esteemed friends on the Cent platform and the entire hive blockchain. It's another day and time to share with you new things that'll help you on a daily basis. Today I'll like to talk on the term Brokerage and relate to how we unintentionally engage in brokerage when we look at it from a broader perspective. It's your friend @faquan, saying hello from this part of the world.
Have you ever been a middleman in a business transaction and you were given a little or a certain amount of money for partaking in that business transaction? If you have at any point in time, then you're a broker.
A broker is someone that connects two people (a buyer and a seller) in a business transaction. It could be any business ranging from real estate, stock, crypto and many others. Today's post will focus on brokerage and not the broker. So, let's look at what brokerage mean.
What is a Brokerage?
A brokerage provides intermediary services in various areas, e.g., investing, obtaining a loan, or purchasing real estate. A broker is an intermediary who connects a seller and a buyer to facilitate a transaction.Source
The above definition of brokerage is a bit complex but I'll say it in a language we all can understand. Brokerage is actually the amount of money paid to a broker for his or her services rendered in a business transaction. This money can be negotiated at the beginning of business negotiation. A good example of brokerage in Nigeria is the 10% paid to real estate agent for being a broker in a land or house deal.
Functions of Brokerage
- Execute trades on the financial markets at the expense of the customer and on his behalf.
- Provide information support about the situation on trading platforms, sending notifications about quotes and trading mechanisms.
- Provide information about other market participants, making the correct decision for the client to conduct the transaction.
https://corporatefinanceinstitute.com/resources/commercial-lending/brokerage/
For any intermediary business to function effectively, the parties needs to exchange adequate information to each other and this is the duty of a broker who is at the field and has knowledge about what the client is in need of.
In the area of stock exchange, the broker has the requisite knowledge on stock market transactions and bears the risk in exchange for a certain financial fees.
Whether on an official or unofficial basis everyone performs the duty of a broker and receives a certain reward for his or her duty (brokerage).
Thanks!
Grace and peace to you all