I think I know the house you're talking about - I saw it the first day it came on the market - the pictures show better than the house. Unless you have knowledge that the seller is under some sort of incredible pressure to sell, I'd say your chances are nil that you could buy this house for $95k more than it sold for in 1998.
I think everyone would like to get a good deal, but that house, with a bigger than average lot, in Devon?....no way. I would agree that the house (if it's the one I think it is) is overpriced and they haven't come off their original list price, but surely there are better options for you? What does your agent think? I'm sure they can find out from the listing agent if there's room for negotiation.
I don't understand what you mean by "substantial cash incentive", because the seller's net is based on the sales price less liabilities owed.
Best of luck!