My father who lives in Mexico sold his house to a US citizen and that person will transfer the money directly to me. Should I pay taxes if that is less than $100,000 ?

Will your father be paying taxes on his gain from the sale in Mexico to the Mexican government?

Yes he will. My concern is I am receiving the money directly from a US citizen and not from my father, however the agreement was between him and the Californian person. The money should go from the Californian person to my father (non citizen) and then from him to me. We are just skipping one step

Personally, I would NOT skip the step.  Have the buyer pay your father, then as a separate transaction your father can gift you cash.  Otherwise, it MIGHT be viewed as your father gifted you the property and you sold it.

Keep the transactions clean, and don't skip any steps.  Also, I would have your father write out a note that he is gifting you cash, in case the IRS were to think he was paying you for some other purpose.

Thanks for your response and your suggestions.

Since the amount is less than $100,000 you do not have to file Form 3520. The money is a gift to you and so does not have to be reported. 

Thank you for your response.