If I actually HAD the money, I'd buy the house, and then happily walk up to the old man and say, "Hey there, here's a gift!" and hand him the deed.... and I'd make sure his daughter was right there when I did it.
And I second the thought that there are going to be people out for blood over this. You DON'T treat the elderly like that, ESPECIALLY if it's a member of your own freaking family.