How to Approach Private Seller

[Andrew Merritt]

My neighbors (renters) are moving out of their house within the week and I've been told that the owners of the house are going to update/renovate and then sell.  How would I approach them and say I'm interested before they do their renovations without sounding like a cheapskate or to much of a salesman?  I checked on Zillow and they estimate the house is worth ~$202k, which is a little out of our price range (assuming we'll need to put 20% down).  

I haven't been inside the house so I'm not sure what all needs to be updated (it was built around 2001, so it can't be that much), so I don't know how much I'd be able to get off of the theoretical asking price.