Brokerage fee

A brokerage fee is the commission paid to a salesperson or broker for selling insurance or securities, respectively. The amount of this fee is usually calculated as a percentage of the transaction price, though it may be a flat fee. For example, an investor asks his broker to buy $100 shares of stock in Company ABC on behalf of the investor. The price of the stock is $15/share, so the total expenditure is $1,500. The broker charges a brokerage fee of 2%, so the fee is $30, which is calculated as $1,500 x .02 = $30. The amount paid in brokerage fees can be substantial, so a buyer should consider this amount when deciding whether to make a purchase.

Other people who charge brokerage fees are business brokers and real estate agents.