"John" wrote:
I made an offer on a house, and the owner went for it. Signed the Purchase &
Sales agreement.

The realtor is still showing the house, which I guess is normal? I'm just
slightly concerned. What if a party submits a bid significantly higher than
mine, the sellers & realtor have would obviously have incentive to go with
the higher bid. Is there any legal way they can do this? They would need to
nullify my contract I expect.

Does this ever happen? am I being paranoid?

If your offer has been accepted, etc., then the only way the seller can legally
back out is if you fail to perform (assuming there are contingencies in the
contract). If I were the seller or the seller's agent, I'd be doing the same
thing -- buyers flake out all the time, and it's good to have a contingency plan
in place.