In order to sell my parents' house do I have to have the electricity up to code for it to be financed?

Agreed! the type of loan the buyer is looking for makes a difference. And, it is up to the buyer to make sure it is insurable with their insurance company.

You can sell the property as-is. An investor may be the option that would work the best. I work with investors and the electric may not be an issue. If you would like more information please feel free to call me.

Financing an older home is not impossible. Only a mortgage lender can give you a definite answer, but here are a few things to think about.
The property must appraise for the sales price or higher in its current condition.
The property must be livable for certain types of mortgage products. If it is unsafe to live there until the rewire of the home, then the type of financing may be more like a construction loan, and a certificate of occupancy will be needed upon completion of the rewire, for the financing to be converted into a more typical mortgage product.
The buyer will need to be able to obtain insurance on the property in order to obtain financing. So a discussion about the home's condition with an insurance rep is needed.

Many homes in need of renovation have been bought and sold, It is up to the buyer to clearly communicate to the lender and the insurance rep about the condition of the property. The home inspection and the appraisal will be key components. Bids for the work that is needed may be necessary to determine how much the renovation will cost. Then determine the type of financing that fits this situation.