What is a Broker?
A broker is a financial intermediary who facilitates transactions between a buyer and a seller. Brokers can work in various markets such as stocks, real estate, insurance, commodities, or foreign exchange. Their primary role is to match buyers with sellers and execute trades on behalf of their clients. Brokers typically earn a commission or fee for their services, which can be a percentage of the transaction value or a flat fee. They may also provide advice and guidance to their clients, especially in complex markets where expertise is required to make informed decisions.
Key Features of Broker:
- Intermediary Role: Brokers act as intermediaries between buyers and sellers, facilitating transactions in various markets.
- Execution of Trades: They execute trades on behalf of their clients, ensuring that buy and sell orders are carried out efficiently and at the best available prices.
- Market Access: Brokers provide access to markets that individuals or businesses may not be able to access directly, such as stock exchanges, commodities markets, or foreign exchange markets.
Difference between Broker and Realtor
The terms “Broker” and “Realtor” are sometimes used interchangeably, but have differences. While a broker is a general term used to describe individuals or firms that facilitate transactions across various industries, a realtor specifically refers to a real estate professional who is a member of the National Association of Realtors and adheres to its Code of Ethics.