The specific laws do differ a bit from state to state. I don't know if Washington state has them, but in Massachusetts, we have real estate attorneys who will work for a fixed fee. Also, when your brother "signs over" the property, there does need to be monetary consideration in order for the transaction to be binding ... a dollar is acceptable consideration.
if the first appraisal was done incorrectly (as it seems it may have been due to the reluctance of the appraiser to make the corrections the bank is requestins) you should insist on another appraisal at the bank's expense. If the in law portion of the home has a separate kitchen ask the sellers to remove the stove and put it in a garage or shed covered by a sheet before the new appraiser inspects the property. as long as the in law unit does not have a stove the appraiser can not call it a multi unit property.... more
This would be the lender' call. You don't own the business but you took expenses against this part time job. I would think if you can prove the dissolution of your relationship with both property and business without further need of either you should have an argument. If you have an established income for the past two years and no future debts or obligations for this business, then you should be able to leave it behind. I would be happy to speak with you off line.