Best Way To Transfer Land From a Family Member

[Jon Ankenbauer]

My wife and I are looking to purchase a piece of vacant land from her parents.  My in-laws own the property free and clear and it is part of 3 contiguous lots that they own (they live on 1 lot and there is another lot separating their lot from the lot we intend to purchase).  My question is; what is the best way to put the property in our name?  We are being conscious of property tax on a vacant piece of land (our potential liability) as well as the potential capital gains taxes (their potential liability).  Their cost basis is about $33k, the agreed upon purchase price is $250K and the expected appraisal might be around $350k-$400k.  They have agreed to sell it using seller financing.  

We intend to hold the property in our name for at least 12 months before starting construction.  In speaking with a lender, I am told that the equity in the property can be used as collateral against the loan if owned for at least 1 year.  This would allow us to come to the table with less funds out of pocket on the front end when starting construction.

Is the best way to complete the transfer of ownership through a traditional sale registered with the county?  Is there a way to utilize the "gift" feature illustrated in the tax code?  Should it simply be left in a trust and payments made to the trust?  I know there are a lot of options, especially since they are family and willing to carry the loan.  Which direction should be be looking?