(other than seller and Realtor always required to disclose deficiencies with the property, like if I knew there was mold, etc)     These rules are going to be different in every state, I'm in Alaska.If I were Representing the seller, and Assisting the buyer (not Duel representation as other states have <we do not have duel rep>, and not Neutral, because I'm representing seller and not representing buyer) and I had reason to believe the buyer would pay more, I would be obligated to express that to the Seller, since I'm representing him. 

Sometimes it can be 2 to 3 times more expensive to try and correct deficiencies of something that is already there.I know a retail developer that wanted to keep an old building.

Sounds like you're willing to catch up the first and pay off the 2nd to take over payment of the property so offer the 2nd start @ 5% of their outstanding balance to release the lien and not go after your seller for the deficiency then go up from there.

Kelvin Letron Brantley Banks are not as lenient today with short sales and most likely would go back after the borrowers for a deficiency judgement.

You can then determine what if any deficiencies there are and create a scope of work to address. 

However, your father may still be on the hook for a deficiency judgement for any remaining unpaid mortgage balance.  

Here is a simple and easy guide that will resolve all these challenging questions:  (3) Secrets Everyone Needs to know about using a 203k loan Finally, the FHA appraisal & inspection - this is no different from a conventional loan appraisal other than the inspector is looking for various health & safety and large deficiencies that would make the home inhabitable.  

Memo 1982-51Findings of Fact and Opinion of the Special Trial JudgeHALLETT, Special Trial Judge:Respondent determined a deficiency of $3,653 in petitioners' 1977 Federal income tax.The issues for decision are: (1) How should the total purchase price of two condominium properties acquired by petitioners during the taxable year be allocated between land and buildings for depreciation purposes;Petitioners resided in Los Angeles, California, when they filed their petition in this case.Depreciation Issue:During 1977, petitioners purchased for investment purposes two condominium properties known as the Via Serena property and the Calle Sonora property.

You can cure code deficiencies but zoning is another thing. 

Just use some common sense when you make the offer pointing out the deficiencies that you see and making room in the contract to run or re-neg if there are more hidden challenges.