re: Are phantom bids legal (real estate)?

Either way, they are staring down a long winter on the market after hoping to capitalize on the spring/summer buying season. Especially if it's in an area of primarily families with children, I would play hardball.

Edit: unless this is a house you just absolutely have to have. If that's the case, hold with your initial offer and have the agent let you know if they get another WRITTEN offer.