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How to Sell Stock Without a Broker Commission: Commission Free Stock Sales



With the low cost of discount brokers it is safer, quicker and probably cheaper to not sell stock in a private transaction. This guide will take you through the important steps. Some specific information will need to come from the customer relations department of the company that issued the stock.

Find a Buyer and Contact the Customer Relations Department

It would be an unusual occurrence that investors may wish to sell stock in a public company without using a broker. Doing so is neither convenient nor quickly accomplished. Private stock is usually not held at the brokerage account and thus is not part of this essay. If it is it will have to be transferred into your name first.

There are two parties that the seller must contact in order to allow a smooth transfer of stock. The customer relations department of the stock issuer should be notified of the transfer. They will provide you with the name of the transfer agent. The transfer agent is an independent company that tracks and maintains records of ownership of company stock. Anytime physical stock is mailed be certain to send it insured and registered. This is the only form of transfer that guarantees the value and status of your stock.

Arrange to Change the Name of the Owner Through the Transfer Agent

Stock is no longer traded in a physical form. Stock is traded by a notational system called book entry form for cost and security reasons. It is possible to get a certificate that acknowledges your ownership separate from your brokerage statement. Transferring stock to another party will necessarily put the stock in book entry form. If the buyer does not have a brokerage account the stock will be left in book entry form with the transfer agent. Ownership will be evidenced with a certificate.

Always Transfer Physical Security Via Registered and Certified Mail

Stock that is still in physical paper form or certificate form can be sent to the transfer agent and put into the name of the purchasing party. The physical stock should be endorsed on the back with a notarized letter clearly stating that the stock is being transferred in a private sale. Because stock is no longer issued in paper form the stock will be transferred to the new party and delivered to their broker or held by the transfer agent in their name. The purchaser will receive a certificate signifying ownership in the later case.

While the price of the sale will be contracted between two parties the price of the sale should be close to the value of the stock at the time of agreement. It is the responsibility of the seller to create his own proof of sale for tax purposes. These same procedures for sale of stock can also be applied to the gifting of stock.

  • Make certain,
  • he stock is still in physical form, that you have the certificate before entering into the transaction. Replacing lost certificates is a time consuming and lengthy task. It may affect price.
  • Be absolutely
  • ain you have mailed the certificates or proof of ownership of the stock to the trustee via registered and certified mail.
3 Mar 2017 4:38 PM | Anonymous

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