Most often when a bank only will accept cash they know one of 2 things.
1 (most likely) the house has problems and will not meet normal mortgage requirements. It needs some serious repairs.
2 (possible) they know the house will not appraise for the price asked. If a cash buyer does not get an appraisal contingency in the contract the bank will net more money.
In this precise case I would doubt your realtor has done anything wrong. Perhaps explaining this would have been wise on her part, but this happens a lot and is not your realtors fault. Foreclosures and short sales have problems. This is one of them.