Squatters on possible deal.. What to do?

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I have a contract to buy a house. 3/1 in an up and coming area in Texas. The seller agreed to sell @ 40 k. 0 down and no intrest and my first payment in 3 months. $333.33 for ten years. The house is supose to be vacant, but when I drove by it in the night there are folks living there. I didn't stop I just keep driving. I think it's his brother in law's girl friend and her kids. His brother in law lived there before he was sent to the big house for a few months stay. The brother in law never signed a lease or made a payment to my sellers like he promised is my understanding. I could make this thing cash flow from day one if I could have it vacant. I never dealt with squatters before. This is not the last house in the world, but it is a great deal.( great price&great terms)

Anyone ever dealt with something like this?