I might have found a motivated seller...now what?

[Jody Powell]

Today I got a return call from someone who had posted their house (by owner) on craigslist. It is a 3/2 1400 sq ft ranch with a 2 car garage on a large (.19 acre) lot. According to the ad it has recently had new paint inside and out, new carpets, flooring,roof, windows, toilet and lights. It has forced air gas heat. They are asking $220k, but I saw it posted on cl for $191k last month. 

When I spoke with the sellers son, he said that they had a buyer but the financing fell through. He also said that the father is in financial trouble and needs to downsize. They would like to be out next month, or mid October at the latest.  Without seeing the house yet, I am estimating that it is underpriced by $10k-40k just based on my searches over the past few months. The father has owned the home since 1991, but I do not know if he has a mortgage or not. 

I would like to get into this for as little of my own cash as possible, though I do have funds if needed. What options should I be exploring and what questions should I be asking? I am meeting with them to see the house tomorrow after work and this will be my first foray into meeting with sellers.