sounds like a prime opportunity. Don't call Gail, call me. LOL - only kidding.
1. See if they'll hold a note at like 5% with nothing down - offer them the 5% now and work out something down the road - maybe it rolls into a 8% after 10 years. There's a MILLION ways to purchase real property - if the seller is willing to negotiate on holding a note - bingo. NOTE: This works if the current owner DOES NOT have a mortgage on the property. If they have a mortgage on the property, may not work, unless note is assumable.
2. What is the price? Get a Realtor to run comps for you - possibly a friend. Make sure it's worth what they're asking. Fsbo's have tendency to overprice their homes (and sometimes they under price them.... :)
3. If 1 is NOT an option - then get preapproved through a MORTGAGE BANKER. You'll get the best deals through a banker - forget brokers (I don't care if they're your friend either). I know the best in the biz.
4. If 3 is the only option - next step would be to hire an attorney asap. Like Gail said - A REAL ESTATE attorney - this is key. ESPECIALLY IF 1 is a viable option - option 1 offers you, the buyer and the seller the most flexibility.
5. Engineers Inspection - Termites and Structure - are they sound - get this AFTER you've got an agreement on price and terms.
6. Negotiate the contract - Attorney's will work things out and protect both parties in the process.
You may want to hire a Realtor - give him 1% of the contracted price - and simply have him or her negotiate on your behalf. Why???? Well, you know these people - and they know you. Their "poor" mother is in the nursing home, etc. NOW - if you allow it, they may, even unbeknownst to them, act as if they're giving away the property, how unfortunate this all is, etc. Don't fall into the trap of playing nice.
Play fair - not nice. As long as they're offering good price and good terms and you truly accept them on the merits - then go forward. If not and you believe they're dumping a home in need of repair on you and they're asking too much and the terms are poor - NEGOTIATE.
A third party, such as a realtor - will take emotions out of it, while at the same time, present choices and options that are fair.
Do not make the mistake and think your attorney will do this. Attorney's negotiate LEGALITIES. Realtors negotiate the sale of real property - HUGE DIFFERENCE. I cannot stress this to you or anybody else - enough.
Run everything through your attorney of course, but at the end of the day, a good real estate pro negotiating on your behalf could go a long way in making the entire deal a WIN WIN.