What is it called when a sponsoring broker pays a buyer a portion of the commission received from a sales transaction?

The correct term for when a sponsoring broker pays a buyer a portion of the commission received from a sales transaction is referred to as a rebate. A rebate in real estate is typically a form of incentive provided to the buyer, where a portion of the commission is returned to them, often as a way to encourage them to work with the broker or facilitate the transaction.

This practice can enhance the buyer's experience by lowering the overall cost of the purchase and making properties more accessible. It's important to note that while rebates are generally permissible in many jurisdictions, they must comply with local laws and regulations. Transparency and disclosure are crucial, as all parties involved, including the seller, should be aware of the arrangement.

In contrast, a discount usually refers to a reduction in the price of the property itself rather than a return of commission. A kickback involves an illicit payment made to a party for referral of business, which is often illegal and unethical in real estate transactions. A referral fee, while it involves payment for a referral service, is usually between agents rather than between brokers and buyers and does not involve returning part of a commission to a buyer.