Advice for a friend whom is a first time homebuyer

I have a friend that is potentially about to have a lien placed on him. He's in the process of buying a home everything is with the underwriter currently. According to his wife's figures the property will be 4 times what they make, they are only putting down 3%, they have a 1 year old child with another on the way, the realtor is also the owner of the property, they forwent an inspection cause they couldn't afford it, and they are currently without a car needing to buy a new one. I've spoken with them but they get all emotional and think I'm trying to ruin their happiness. I am asking advice about the situation basically to show my friend what others would say about the purchase of this home. So the question is would this home be a good investment?