DUAL AGENCY not disclosed, pressuring 200k over asking with seller financing

[Amanda Kwem]

I'd like your opinion on a matter.  Myself and 2 of my business partners/friends are first time home buyers looking to purchase in a hot market in CA.  There is a house we like and offers were due yesterday.  List price is 998k but agent is insisting and wrote paperwork for us to sign for a purchase price of 1.2 million.  They said they need this price to be "competitive, though i personally don't agree with offering that much over asking.  I was at work yesterday and I was being pressured to sign the contract as offers were due yesterday and I randomly asked if they were also representing the seller and they said yes.  It's 2 co-agents and I was pretty upset and said that should have been disclosed.  Though offers were due yesterday they have extended it for us and are doing everything in their power to get us to sign.  They've promised my friend (who loves the house and isn't smart financially imo) that they can get us seller financing with no money down (with either a program or getting the seller to agree) but everything seems fishy to me.  In the contract they were trying to get us to rush to sign all contingencies were waived except a 7 loan contingency.  I of course pointed this out.  They said they have other offers, some above asking (which I don't deny given the market and us being in the Bay Area).  My questions are

1.  Are they simply trying to get us to buy so they get double commission

2. If there is a loan contingency but we use seller financing, what happens if we don't agree  to the terms of the presented loan? Will we be out of any money

3. dual agency seems like a terrible idea, pros and cons

4. Offers were due yesterday but they're still going back and forth with me and editing the contract in an attempt for us to comply. why?  There has to be other offers that are above asking with bigger downpayments

5. Does seller financing benefit the seller?  Taxes? getting the house back if anything goes wrong? 

I asked about the terms of seller financing but they said we'd be to sign an offer to present a written offer to the seller first who knows nothing about seller financing but they are confident that they can convince them.  Is that correct?  The loan contingency is 7 days.  What happens if this isn't figured out in 7 days of signing? Do I lose the earnest money?  

Personally this has red flag all over it and I won't be rushed into signing anything  We ended up viewing the house 2 days before offers were due.  What are their motivations?  Anything wrong of illegal here.  This is a very simplified summary by the way there is so much more I can write.  Even after a heated text thread of me laying out all of my concerns and them saying we should pass on the house (after I pretty much told them I don't want the house), they still came back saying they added a loan and appraisal contingency and if we are okay to sign. WHY?