Possibly buying a relatives house...anything I need to know?

[Joe M.]

Finance and I currently looking for our primary residence.  Close family of ours are (very) slowly looking to downsize homes.  We didnt talk numbers yet but they said if they move, they would be willing to sell their house to us below market.  My guess knowing them, anywhere between 40-60k below market.  Their house is paid off.

As of right now all of this is hypothetical, but trying to plan ahead, is there anything I should know buying a house from a family member significantly below market?  Loopholes? Taxes? Financing?  Personal insight to your own experience?

Let me know and thanks