Buying House from Parents

[Geoff Scheid]

My parents recently built a new home and moved out of the house I grew up in throughout my childhood. They listed for-sale-by-owner for about six months with a lot of interest and went under contract twice, but the buyers weren't able to close. Earlier this year, my fiance and I decided we wanted to buy the house. (In Texas if that makes any difference)

There is currently a mortgage at about $80k, the home was appraised for $165k, and we've negotiated a sales price of $155k. Neither I nor my parents can pay off the mortgage immediately, but within 2-3 years we would be able to. 

What's the smartest way to buy this house to minimize transaction costs?

I've read forum posts here and elsewhere that advocate a number of strategies from wrap-around owner financing to using quitclaim deeds. But I haven't found someone in quite the same situation I'm in.