Seller Financing structure

[Johnny Wehmann]

Before I start paying my attorney, I would like to hear suggestions from BP members.  I'm working with an owner open to seller financing with a 3-year balloon.  The details are as follows:

Purchase price $385,000.  It has historically been rented for $1,800/month.  The mortgage balance is roughly $180,500. Payments are roughly $1,500 including taxes and interest.  The home is also collateral for a line-of-credit balance of $62,000, and a current monthly finance charge of $130. 

The sellers are not desperate, they got tired of renting so the house has essentially been vacant for the past 3 years aside from it being a guest house for family visiting town.  It has never been listed for sale.

This would be my primary residence.  I can afford to pay off the mortgage of $180,500 but not the line-of-credit.  Would it be wise to try and pay off both or neither? Or just leave the notes in sellers name, take title, and have a loan servicing company take my monthly payment and distribute accordingly? 

My fiance will be finishing school and our combined salaries will easily allow us to obtain a note for the full purchase price when the 3-year balloon comes up.  I appreciate any input you would like to share. 

[Johnny Wehmann]

@Judah Hoover  They expect $1,800 per month which we could handle but some of these comments have me 2nd guessing whether it's even worth it.  If I make an offer I think I'll keep it simple as you suggested and move on if it doesn't fit their needs.