If the wife works for the same broker as her husband, you still have a dual agency situation. Plus a conflict of interest given that her husband represents the seller and her father-in-law is the seller.
If you want to go forward with the deal, I suggest you hire an attorney to monitor the transaction and protect you, since your agent has dual agency and conflict of interest issues.
If you want to go forward with a different agent, hire an attorney to inform your agent of your intent to change agents. If your agent refuses to go along, your attorney will give you advice on how to proceed.