HIre a buyers agent and have them work up a market analysis for you using comparable sales, actives, and expired listings in your neighborhood. With market data in hand, you will be more educated when you go to speak with the owners.
Do the sellers have a listing agent? If not, they could be using a list price for the home "from thin air." Most homeowners determine the listing price for a home based on what they have in it, or the emotional attachment they have to it. They tend to overvalue and don't base the pricing based on what the competition is.
As a buyer in this situation, already renting, don't let your emotions get in the way of what the market determines is a fair value. Just because it's easier to buy the home your currently living in, doesn't mean you should pay more than market value.
A good agent will work for you and most likely be paid by the seller. Since you and the buyer are already connected, and the agent does not have to find you a new home or market the sellers property at all, they should be willing to work with you both on the commission and act as a transaction broker if this is what your state allows.