It depends on what you have to do with the sale. If you were the seller and knew you had a problem and did not disclose it, you could be responsible even if it was sold as is, they would have ti prove what you knew, when you knew it and if you hid the fact from the buyer.
If you are buying the home that this person bought as a short sale, as a buyer you want to negotiate what teh seller should do or not do by how much you are willing to pay.
I'm not sure I understand your question. If you want to buy a house for $450K or $120K, or any price, the only basic requirement is that you be able to qualify for the loan. It has NOTHING to do with the property owner, whether it is a bank or not. Does that answer your question? If not, let me know!