What you are saying really does happen all too much. Don't assume that it is corruption based on face value, though that may well be the case.
Remember that many times ability to perform is more important then the price of the offer. If the buyer can not perform and the house falls out of escrow due to it, there is an appearance that there is something wrong with the house and the seller could easily loose $25,000 because of it. Also there is a loss in value anytime a property is on the market over a certain amount of time.
If your offer was 25,000 higher, what was the appraisal value?
Because the other offer may have been higher than yours and maybe the home did not appraise, only to have the seller agree to a price concession.
Also if the agent and seller have a good idea of what the appraisal price is, and the buyer is offering more but does not appear to be able or willing to make up the difference if it does not appraise. it would be wise to not accept the offer.
Quite frankly many agents do not have confidence in the performance of other agents. I had a listing once where I found out a week before the property was to close the buyer had canceled their loan in order to shop for a better deal. You can not make this stuff up.
We as a lender make a business of helping agents and buyers get their offers accepted. What we do differently is that we will close the loan on time or with in 21 days, if not and it is our fault we will pay the per diem interest on the sellers existing note up to $215 a day. Having a guarantee on the table gives the sellers and their agents a lot more confidence that the loan will close.