Yes.
I don't know what sort of misconduct you're imagining, but it is completely ethical for an agent to sell their own home.
Why do you think that there's more "room for misconduct" with an agent selling their own home than with a listing agent representing another seller?

I wanted to chime in and say that it can be yourl Advantage Since you are only dealing with one party on the Seller's side and The Seller Being a disclosed Realtor must abide by a Code of Ethics that some sellers may not abide by.
The transaction can go any way depending on the seller and buyer. Just be cautious not matter who or what the Seller is and get a Good Realtor to look out for your best interest and most of all enjoy the home buying process.
Brian

I'll address your question from another perspective, since the others have already clearly answered your question on ethics.

If agent A hired agent B to facilitate the sale of agent A's property, then would buyer C be better or worse off than if agent A were to facilitate the sale himself/herself? In either case, the seller most likely will know more than and will still be more connected than the buyer.

Keep in mind that cops and lawyers go into court with a similar advantage. Medical professionals go into hospitals with a similar advantage. Similarly, I suspect you have an area of expertise where you get to enjoy your advantage too.

If you really want to level the playground, then you'll need to do what agents do: educate yourself on everything you can get your hands on pertaining to real-estate. As an investor, that's what I do; however, I don't stop there. I want to know what the lenders, inspectors, appraisers, and other real-estate professionals know too. I'm not saying that I want to be a Jack of all trades. I want to know what they do, from where they get their info, which experts they esteem, and the process they use for rating their peers.

The irony is that I've encountered several agents relatively recently who insisted that I knew too much, and insisted that I had to be an incognito agent. I'm not; I'm just an investor with an insatiable appetite for learning. I know of other investors (including my mentor) who do this too. So, instead of complaining about their advantage, you should take charge of this situation. Why not check out some Realtor study materials? Why not check out some REI clubs and/or forums? Why not start networking with other real-estate pros?

It is ethical for a realtor to sell their own home. They must disclose it is listed by an agent. As a Buyer, do your due diligence with inspections. The Listing Realtor is also bound by ethics in their disclosures. Make sure you have all the disclosures. Are you working with a Buyer's Agent? THis would be advised in this kind of situation.
Elisabeth@movetoevergreen.com

Yes it is as long as the Seller discloses that they are a Realtor.
Brian

Article 4 of the REALTOR(R) Code of Ethics requires an agent to make his or her 'true position' known. Many state laws require the same disclosure. Are you uncomfortable with the licensee owning the home, or that the licensee and your agent know each other? You should have a conversation with your agent, to make certain that he/she understands and will fulfill his/her fiduciary duties to you. Most agents in many markets know each other; the relationship may be casual, or they could be good friends. The question is, will the buyer agent does his/her duty to you and represent your interests above all others, including his/her own? (That last sentence is from Article 1 of the Code of Ethics.)

It is ethical for them to disclose that they were the owners upfront, representing themselves.

With the knowledge that the owner is an agent, you have the choice to either trust that they will continue to act ethically, or if you are suspicious, you don't have to deal with them. If you do not trust the agent(s) then go look for other houses.

Having a real estate license just means we have to notify people that we have our license. It does not stop us from being able to sell our own property.

If you have a buyers agent who is obligated to put your fiduciary interests first and foremost, it is less likely that a seller, licensed or unlicensed, will take unfair advantage of you.