Looks like a sale of $238K to me.  Or you could argue substance over form, and call it a sale of just under $217K but they had to jack up the price in order to get the mortgage so the parents could walk away with $214K.  Adding the "gift" to the "cost of sale" means telling the bank one thing and IRS another.  But the bank knows what's going on, and apparently the appraisal came in high enough.  The actual reduction in cost isn't much more than the commission they would have paid, and maybe the discount for a quick sale.

No gift tax, both parents have an $18K annual exclusion, as long as they didn't make other large gifts to the kid last year.