Is it rabbinically permitted to buy a house on a short sale when you know that the owner is a Jew? I’m handling w/ a Jewish brokerage firm. They told me that the owner is willing to sell the house, but can the owner have any halachic rights after I purchase it?
I understand that you mean that the seller is selling for less than the value of the property in order to avoid foreclosure and to mitigate his losses, and your concern is that he might claim afterwards that he was forced to sell and attempt to void the sale, or to demand further payment.
There would not appear to be grounds for such a claim should he advance one.
In general someone who is forced to give away something against his will, or is forced by the buyer to sell something at less than the value, can claim afterwards that the sale was void because it was done against his will. However, in your case you are not forcing him to sell at less than the value, rather the circumstances that he finds himself in leave him with no choice but to liquidate some of his assets in order to avoid further losses. As such, even if he feels that he has no choice but to sell cheaply, you may buy it. (This is true particularly in this case, in which he is selling the house in order to pay off the mortgage to the bank which he took out to pay for it – in other words, he is actually not really selling his assets cheaply, because this particular asset has not yet been paid for in full!)
In fact, you may well be doing him a favor, because if you don’t buy it he may well have to go through the foreclosure procedure, and thus it would be in his best interest to cut his losses and sell it to you even if you would be willing to pay less than the real value of the property.