To the OP, go talk to the Land Office. They know how much land in the area is selling for. But as has been asked here, it is important to know what kind of papers the land has. Maybe your mil does not even own the land legally. It shall have a chanote or a Nor Sor 3 Gor. The paper stating who owns the land shall have a red garuda on the top or a green in case of NS3. Anything else, walk away.

I am not familiar with the area, I live in Udon Thani province, but the price sounds completely out of proportion. And, as you have been told, it is very strange that your mil wants to sell land to her daughter. That is not normal here within family. Something is fishy.

Value of farm land, depending of area and deed (chanute), will now normally be between 40k to 100k a rai.

Talked to my wife again and she tells me that it is very strange that MIL would want to sell a small piece of land to her daughter to build on.

Most families would gift the land to the daughter to build on.

My MIL did offer us a (free) 1/2 rai to build on in Chayaphum, but it's not where we wanted to build. She refused point blank to move it to Petchabun, which I thought was a bit mean.