Hi Cliff. Please excuse the delay in answering.
The agent is required to present every offer to the seller up until close of escrow, even if there is an accepted offer already. The Seller is not required to consider the offer, but must be informed.
In your posting you were not exact as to when you made the offer, but you indicated in your answer that it was only submitted to the Seller yesterday. It should normally be submitted to the Seller within a reasonable time frame from when you made the offer (i.e., if you submit an offer Friday afternoon to an institutional seller it would be reasonable to expect them to be made aware of the offer at least by some time on Monday). Normally the Realtor representing you would follow up with the listing agent in an effort to encourage submission to the Seller as quickly as possible.
In you offer, you will have indicated a time frame for which the offer was valid - has that expired? They may still reply to that offer after the time frame but you would normally want it replied to before expiration.
With respect to the listing agent being 'difficult to work with' ... that is one of the reasons you have someone representing you who is used to dealing with a variety of other agents. Sometimes a listing agent has many listings (I know one who has 93 REO listings) and so becomes a little mechanical in their management of their inventory. They sometimes get many offers, some ridiculously below asking, and are obliged to submit every one. Recently I inquired about an REO listing where the listing agent was submitting 17 offers for a variety of properties in one day.
With respect to banks being 'irrational' - I've seen one department of a bank accept an offer while another department proceeded with foreclosure, and the buyer eventually buying the property after foreclosure for $100,000 less than what they had been willing to pay. I've seen banks refuse to negotiate because no one wants to take the responsibility. And I've seen them overwhelmed by paper work - losing paperwork - and just reacting to the latest phone call rather than being proactive. They have difficulty ascertaining what is a fair offer or not and rely heavily on process rather than judgement to make decisions. They will sometims refuse to sign documents even though they are prepared to make a deal. They're having tough times.
Work with your Realtor to overcome the obstacles - realize these obstacles are one of many reasons that REO listings are normally 'below market' - and don't put all your eggs in this basket: Keep looking and don't hesitate to put in an offer on another property if it seems desirable.
With respect to loans, without knowing the property and your circumstances it is difficult to be precise, but even in today's market there are a variety of loan programs available. 80% loan to value are common in mid-range priced properties, and FHA loans can go up to 97%.
Good luck ... Wayne