Your wording of your question makes it a little hard to figure out what you are talking about. If your contract price, for example, is $100,000, and the appraised value came in at that amount, but your brother, who is the seller (??) is giving you a gift of equity of, let's say, 20%, o4 $20,000, your purchase price is still $100,000, it is just that he is only getting the $80,000, but the price is not really lowered. I assume you are financing the home. The lender may require you to have 5% of the purchase price in your own funds in the deal. Although if you are getting a gift of equity of 20%, or you are taking out an FHA loan, this may not be the case. Sometimes it's the underwriter's call, and may depend on your credit history and debt to income ratio.