Can a seller deny offers financed by certain banks?

[Paul Cordero]

I preapproved a borrower to put in an offer, but the listing agent denied the offer because it was from a big bank. There is a misconception that my bank won't finance a "flip" transaction. Our guidelines clearly state that we will, so I forwarded to the buyers agent, to forward to the listing agent. The buyers agent sent the clients to a broker thinking their prequal would do the tick but I tried to get it through to him that since the loan is under the conforming loan limit, the guidelines will be set by FNMA or Freddie for any lender.

Any suggestions on what I should do here. Is this ethical for the listing agent to do?