What does the term 'brokerage' refer to in a real estate context?

In the context of real estate, the term 'brokerage' specifically refers to a business entity that is licensed to conduct real estate transactions on behalf of buyers and sellers. This entity is typically run by a licensed real estate broker, who oversees the activities of agents and ensures compliance with state laws and regulations. The brokerage facilitates the connection between parties in a transaction and plays a crucial role in the buying and selling process.

Understanding this definition helps clarify the vital role that brokerages play in the real estate market, as they provide the necessary framework for agents to operate, handle client transactions, and navigate legal requirements. Other options might mention aspects related to real estate transactions, but they do not accurately capture the essence of what brokerage entails.