The only thing you can do, to hold this together, is to communicate!
Tell them what is going on.
Take a Realtor's CMA with you and explain.
Good luck and may God bless
You may consider buying one of the several homes on the market at a reasonable price if your relative refuses to listen to reason. It is a great time to buy, interest rates are still very low, and prices are low too!
I would call a local Realtor and explain the situation to him or her. Ask them if they can help you by providing a Comparative Market Analysis. They should be able to do that for you free of cost or at a nominal charge.
Having said that, if you do decide to go through with the purchase, you might want to invest in a formal appraisal of the home. THat will give you a professional opinion of value on paper. Also, your lender will need an appraisal if you will be getting the loan for the purchase.