Agents are licensed by each state, so it is very possible that you could be in one state and need a license in another.

If you have a local agent in your area, they will refer you to an agent in another area and deserve some sort of compensation for their referral. It comes out of the agents' commission, so it really should not be a problem for you.

For example, your agent in Florida where you live now could refer you to an agent in Wisconsin to sell great aunt Gertrude's house after she passes away. The Florida agent can't do it because she isn't licensed in Florida.

Or the agent that sells your house when you move out of California could refer you to an agent in Texas where you are moving...

Yes, very often an agent will receive a referral fee from another agent.

Thanks. So the real estate agent here (where we will be selling our house) was used by a family member but we have not contacted him yet. The real estate agent in the other state is searching for houses for us. She said if we give her his name she will contact him to represent us here, will receive a referral fee, and then will take the referral fee off our closing there. Is there anything wrong with this scenario?

I'm a real real estate agent. What you describe is normal. There is no extra expense to you. Like any business arrangement there are incentives. The buying agent, in your case, pays the fee from his/her commission on your purchase. The fee serves as an incentive for your local agent to hand over the business to another agent when the local agent can't service the client (i.e. moving out of state). The amount/percentage is negotiated between the agents (20-25% is customary).

I am in California, IIRC, 25%.

Total commission was 5% of sale price, paid by the seller. Each realtor receives 2.5% of the sales price. My buyer’s agent was a referral, for the referral, the referring realtor received 25% of the buyer’s agent’s commission.