Broker
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A broker is an individual person that arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Distinguish agent—one who acts on behalf of a principal.[1]
Definition
A broker is an independent agent used extensively in some industries. A broker's prime responsibility is to bring sellers and buyers together and thus a broker is the third-person facilitator between a buyer and a seller. An example would be a real estate broker who facilitates the sale of a property.[1]
Brokers also can furnish market information regarding prices, products, and market conditions. Brokers may represent either the seller (90% of the time) or the buyer (10%) but not both at the same time. An example would be a stockbroker, who makes the sale or purchase of securities on behalf of his client. Brokers play a huge role in the sale of stocks, bonds, and other financial services.[1]
There are advantages to using a broker. First, they know their market and have already established relations with prospective accounts. Brokers have the tools and resources to reach the largest possible base of buyers. They then screen these potential buyers for revenue that would support the potential acquisition. An individual producer, on the other hand, especially one new in the market, probably will not have the same access to customers as a broker. Another benefit of using a broker is cost—they might be cheaper in smaller markets, with smaller accounts, or with a limited line of products.[1]
Before hiring a broker, it may be considered prudent to research the requirements relating to someone using the title. Some titles, such as Real Estate Brokers, often have strict state requirements for using the term, while others, such as Aircraft Brokers, typically have no formal licensing or training requirements.[2]
Etymology
The word "broker" derives from Old French broceur "small trader", of uncertain origin, but possibly from Old French brocheor meaning "wine retailer", which comes from the verb brochier, or "to broach (a keg)".[3]
Types of brokers
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- Ad broker
- Agri broker
- Aircraft broker
- Arms broker[4]
- Auto broker
- Broker-dealer
- Brokerage firm
- Business broker
- Cargo broker
- Commodity broker
- Customs broker
- Domain name broker
- Energy broker
- Information broker
- Insurance broker
- Intellectual property broker
- Investment broker
- Joint venture broker
- Foreign exchange broker
- Leasing broker
- List broker
- Marriage broker
- Mortgage broker
- Options broker
- Inversiones
- Pawnbroker
- Power broker (term)
- Prime broker
- Real estate broker
- Retail broker
- Ship broker
- Sponsorship broker
- Stockbroker
- Sharebroker
- Truck Broker
- Office broker
- Online broker
- Serviced office broker
- Yacht broker
- Website broker
References
- ↑ 1.0 1.1 1.2 1.3 Spiro, Rosann L., William J. Stanton, and Gregory A. Rich. Management of a Sales Force. 12th ed. Boston: McGraw-Hill/Irwin, 2003
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- ↑ http://www.wassenaar.org/guidelines/docs/Elts_for_effective_legislation_on_arms_brokering.pdf
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