Of course it is legal!? It is "private property" (not retail sales).? It wouldn't matter if there was an insider deal... that is between the owner and their sales representative.? They don't even have to list in the local Multiple Listing Service if they don't want.
The only case there might be an issue is if the U.S. Fair Housing Act were blatantly violated, such as discrimination based on gender, age, race, ethnicity, family type/status, handicap condition.... but those are usually pretty hard to prove.
"Can I report the Realtor?" -
It would be pointless; the agent works for the seller, and the seller has authority on what they do with their own property.? And no local Real Estate board would do anything regarding such a "complaint".? And no State Licensing department dictates what an owner must do, other than providing the required disclosures...
If the house is off the market, there is nothing stopping you from sending a written formal offer direct to the property owner.? However, if you don't wait a sufficient amount of time, the owner may have to pay their prior agent a commission if you buy.
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