How can houses have such a low monthly payment?

That amount is correct. It says right there in the ad, that's the monthly payment if you put 20 percent down and if you get a 30-year fixed mortgage at 6.25 percent. Just google "mortgage calculator" and run the numbers for yourself, if you want to confirm. That's only the mortgage. You'll also have to pay the taxes on the property, which will add close to $200 a month to your total. In addition, you'll need insurance, which will add still more. That house has such a low monthly payment because it really doesn't cost very much. It's a small house, and it's on a small lot. You can't tell from the ad what type of neighborhood it's in. There could be good reasons why it's selling so cheap.

A mortgage for $85K at 6% interest rate costs $510 per month. Taxes, insurance etc. are more and depends on the exact location. Talk to a local realtor and they can probably help with estimates of other costs.

That does not count insurance, property tax or PMI insurance, that can double your payment or more.

Do understand that the payment is for principal reduction and interest only, quoted at the rates offered for AAA+ clients. As well, the payment will increase by about $300 monthly to cover property taxes and property insurance. If your parents want to buy, insist that they hire a qualified BUYER representative real estate agent, who will represent their interests rather than those of the sellers. Check for an agent with an ABR professional designation.