{"id":116245,"date":"2019-09-20T12:00:11","date_gmt":"2019-09-20T18:00:11","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=116245"},"modified":"2021-03-16T14:56:06","modified_gmt":"2021-03-16T20:56:06","slug":"how-do-broker-dealer-fees-really-work","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/how-do-broker-dealer-fees-really-work","title":{"rendered":"How Do Broker-Dealer Fees Really Work?"},"content":{"rendered":"

Utilizing broker-dealer firms is one of several forms of investing in commercial real estate<\/a>, and there are many benefits to this avenue.<\/p>\n

Broker-dealers must be licensed and registered with the SEC in order to sell securities and investments on behalf of clients, and if they work for a reputable company, they have that company\u2019s backing in their favor, which eliminates some potential risk.<\/p>\n

In addition, broker-dealers often provide investment advisory services backed up by extensive, credible research and expertise.<\/p>\n

That said, something investors must naturally keep in mind when buying securities and investments through broker-dealers is that they charge investors service fees for each transaction\u2014which could be significant.<\/p>\n

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What\u2019s more, it can be difficult for investors to determine in advance exactly how much the broker-dealers charge and what the fees cover.<\/p>\n

While broker-dealer firms are legally bound to disclose all fees and their amounts to investors, exactly how they do this is left largely up to them. Fee disclosure methods and terminology used can vary greatly among firms, which can be very confusing for investors.<\/p>\n

However, investors can still benefit from broker-dealer transactions and minimize fees if they know what to look for and what to avoid.<\/p>\n

Related: <\/em><\/strong>Demystifying the SEC and How It Regulates Real Estate Deals<\/a><\/em><\/p>\n

What to Look for in a Broker-Dealer<\/h2>\n