Is so, could you point to me to the correct legal article or rule that says this?
I can't, but she can: http://activerain.com/blogsview/1813272/in-california-all-of
2. What can I do ?
You can A) female dog & moan - makes you feel a little better, B) report their butt - if enough people take the time to do it with any luck they might just lose their license, C) sue, D) do what most people do which is sad - move on to the next one, E) be persistent and sneaky and figure out a way to get to the asset manager - (and perhaps their boss) which may or may not help any. Theoretically banks are supposed to be liquidating their non-performing assets - if the boss finds out the asset manager is doing a crappy job, they just might get a talking to - enough talks and maybe somebody will lose their job. Squeaky wheel gets the grease, make a big enough stink and maybe you'll get some satisfaction - though you probably won't get the property no matter what you do - with the exception of suing and then you take your chances. Is it worth it?
And surprise surprise, I'm not an agent. How do you know? Because I answered your question. I'm tired of stupid lazy agents that don't know their own job or obligations which seems to be pretty much 98% of them - present company excepted of course ;)
The listing agent has a fiduciary duty to the seller (the bank) and generally is the only point of communication for your agent and you. Some banks intruct their agent to only send on offers that meet their specific requirements and therefore in those cases the bank will see those offers. The others then won't be submitted.
It seems you need more information from this listing agent to know what is really going on. If in fact he is holding an open house this Saturday, you can try meeting him in person there with your agent present to get to the bottom of it all.
As for your questions:
1) It depends. In California, the seller can direct the listing agent to present only certain offers based on the seller's qualifications. These conditions can extend beyond the offer price and deposit. So, if such a condition was provided by the seller, then this listing agent has executed his fiduciary duties, no matter how unpleasantly. But, if there is no such condition (which only the seller and listing agent can know), then you may have a case. Still, it's nearly impossible for you to confirm and the deal will likely be gone before you can take action.
2) There's not much you can do. The seller is making an offer to sell and before any contract is entered, the seller is not obligated to sell. The seller can choose to use any agent just like you can. If you really like the property, you can try to enter another offer, possibly with another agent.
I have to make one observation though. Everyone who replied was a realtor and no one answered my first question.
Most tried point to why my offer might have been weak without the data (just fyi- it was as strong as it can get > 800 credit, same bank pre-approval, significant money down, fantastic & consistent W-2 wage for 8 years, willingness to go higher if indicated ......).
No one remarked on the crass language and lack of etiquette of the listing agent's note and approach to service.
It is very common for REOs to sell over list price.
Many agents, when working with banks, will send top offers to the bank. They may have received dozens of offers so they narrow it down.
You can perhaps report this agent to the local MLS board, but I suspect they are operating within the guidelines of their REO contract with the bank.
My honest feeling is that there's nothing else you can do here.