A real estate agent cannot legally lie about other offers on a property. Every state’s licensing law requires agents to deal honestly with buyers and sellers alike, and inventing a competing bid to push you into raising your price or dropping contingencies is misrepresentation. It can cost the agent their license, expose them to a civil fraud lawsuit, and, if a REALTOR®, get them expelled from the National Association of REALTORS®. Proving it is the harder part, so knowing what agents are allowed to say, what they aren’t, and how to verify what you’re told is where your protection actually comes from.
Why Fabricating Offers Breaks the Rules
State real estate licensing laws universally require agents to deal honestly with all parties in a transaction, not just their own clients. An agent who invents a competing offer to inflate the sale price is committing misrepresentation, which is grounds for discipline under every state’s licensing statute. State real estate commissions can fine agents, suspend their licenses, or revoke them entirely.
Agents who belong to the National Association of REALTORS® are bound by a separate Code of Ethics. Article 1 of the 2026 Code is direct: a REALTOR®’s obligation to promote a client’s interests “does not relieve REALTORS® of their obligation to treat all parties honestly.”1National Association of REALTORS®. 2026 Code of Ethics and Standards of Practice That duty of honesty runs to buyers even when the agent represents the seller. A listing agent who tells you there are three offers when there are none has broken both the licensing law and the ethics code.
What a Listing Agent Is Allowed to Say
Telling buyers that other offers exist is legal and often expected. Under Standard of Practice 1-15 of the NAR Code of Ethics, a REALTOR® who receives an inquiry about competing offers must, with the seller’s approval, disclose whether other offers have been submitted.1National Association of REALTORS®. 2026 Code of Ethics and Standards of Practice If asked, they must also reveal whether those offers came through the listing brokerage or from a cooperating broker. The seller controls whether that information gets shared at all.
What the listing agent generally cannot do is disclose the specific price or material terms of another buyer’s offer. That information belongs to the buyer who submitted it. A listing agent saying “we’re in a multiple-offer situation” is proper if it’s true. An agent volunteering suspiciously precise details about a rival bid should raise questions about where that information came from and whether the offer is even real.
The line is simple. Disclosing that real offers exist, with the seller’s permission, is proper. Fabricating offers, or inventing details about real ones, is fraud.
One boundary worth naming: if you’re in a dual agency arrangement, where the same brokerage represents you and the seller, the agent already sits on a structural conflict. State rules restrict what a dual agent can reveal about price, and some states bar them from disclosing that a buyer would pay more without written consent. Having your own independent agent is the single best safeguard against being pressured by claims of competing bids.
Red Flags That a Competing Offer May Be Fake
Phantom offers tend to follow a pattern. Be skeptical when:
- A listing agent suddenly announces competing interest only after you submit your offer, particularly on a home that has been sitting on the market.
- The language stays vague. “There’s a lot of interest” and “we’re expecting other offers” are not the same as “we have received a written offer.”
- You’re pressured to respond within hours, waive contingencies, or raise your price sharply, but the agent can’t provide any specifics about the competing bid.
- There’s no structured process. A legitimate multiple-offer situation usually involves all buyers submitting their best offers by a set deadline.
How to Verify a Competing Offer Is Real
Buyers rarely have an ironclad way to confirm rival bids, but a few tactics make deception harder to pull off.
Ask for Proof Through Your Agent
Your buyer’s agent can ask the listing agent to confirm competing bids. Some listing agents will provide a redacted copy of a rival offer’s first page, showing that a real document exists without revealing the other buyer’s identity or exact terms. Sellers and their agents aren’t legally required to provide this proof, but an outright refusal to confirm anything is worth noting. An experienced buyer’s agent can often read the situation based on how pointed questions are answered.
Use an Escalation Clause
An escalation clause states that your price will automatically rise by a set amount above the highest competing bid, up to a cap you choose. The clause typically requires the seller to produce a copy of the competing offer that triggered the escalation before the higher price takes effect.2National Association of REALTORS®. Part 4, Appendix IX — Presenting and Negotiating Multiple Offers A seller cannot activate that clause with a fabricated bid, because the clause forces a real document to surface. Not every seller will accept an offer with an escalation clause, but when they do, it effectively removes the phantom-offer problem.
Keep Your Appraisal Contingency
The financial trap phantom offers set is overbidding above the home’s real market value. If the appraisal comes in below your purchase price, your lender will only finance the appraised amount, and you have to cover the gap in cash. Buyers who waived their appraisal contingency to look more competitive can’t walk away without losing their earnest money. Keeping the appraisal contingency in place is one of the strongest defenses, even in a hot market, because it limits how badly a fabricated bidding war can hurt you.
What Happens to an Agent Who Lies
An agent caught fabricating offers can face consequences on three separate tracks, and any one of them can end a career.
Ethics Sanctions
If the agent is a REALTOR®, an ethics complaint filed with the local association can lead to sanctions ranging from a letter of reprimand and mandatory ethics training to fines or expulsion from the association.3National Association of REALTORS®. Ethics Complaints, Arbitration Requests, and Related Information Expulsion means losing access to the MLS and the REALTOR® trademark.
License Discipline
State real estate commissions investigate licensing law violations independently of any NAR process. They can subpoena documents, compel testimony, and examine transaction records. Penalties for misrepresentation typically include fines in the range of $2,500 to $5,000 per violation, license suspension, or permanent revocation. A revoked license ends the agent’s ability to practice real estate in that state.
Civil Liability
A buyer who overpaid because of a fabricated offer can sue the agent and their brokerage for damages. Compensatory damages cover the amount you overpaid. In cases involving intentional fraud, courts in many states allow punitive damages on top of that. The brokerage usually shares liability because agents act under their broker’s supervision. Civil fraud claims carry statutes of limitations that vary by state, often three to six years from when the fraud was discovered or reasonably should have been discovered.
How to Report an Agent You Believe Lied
You have two separate complaint channels, and you can use both at the same time.
For agents who are REALTORS®, file an ethics complaint with the local REALTOR® association where the agent holds membership. You must file within 180 days of when you knew or reasonably should have known about the unethical conduct.4National Association of REALTORS®. Part 4, Appendix X — Before You File an Ethics Complaint That deadline is strict. The complaint must be in writing and identify which article of the Code of Ethics you believe was violated. Article 1, which covers honesty to all parties, is the most common basis for phantom-offer complaints.
Separately, file a complaint with your state’s real estate commission or licensing board. This is the agency that actually controls the agent’s license and has the power to suspend or revoke it. Every state commission accepts written complaints, and many now have online filing systems. The commission investigates independently, and its process isn’t bound by the 180-day NAR deadline, though filing sooner strengthens your case.
Before you file with either body, gather everything you have: text messages, emails, voicemails, written notes from phone calls, screenshots of listing activity, and your purchase agreement. The strongest complaints include a clear timeline of what the agent told you, when they said it, and any evidence that contradicts those claims. If other buyers received similar representations, their accounts can support your case.