Agent telling me to increase buy offer. Is this normal?

[Kyle Danielson]

First time home buyer here. I'm trying to understand the world of real estate but the longer I deal with this the more I get the feeling real estate agents are like used car salesmen... shady. I told my agent to put in a buy offer for me for $5,000 over asking price, instead she says she will check what the highest offer is, then tells me to offer at least $50,000 over asking because that's the highest offer. I know agents get a commission based on sale price so she has an interest on me bidding a higher price. The whole thing seems shady, especially when I Google this and people say it's illegal for seller agents to disclose offers and their amounts. Should I replace the agent or am I being paranoid?