Jane first and foremost accept my condolences...Jane you say that short sale is ready to close...So, did seller signed all the legal documents such as grant deed, purchase contract and escrow instructions? If so, and if family wants to continue chances are you still can finish it. On the other hand, a short sale is usually done to prevent sellers credit to get really affected. In this case credit really does not matter any more....( I apologize if my comment my sound feelings-less) Perhaps the best thing to do is to consult with a real estate attorney. Once again accept my condolences.