Should I just not entertain any property that was listed?

High level $200k for a $36k gross return is a low yield..however I think there are a few variables..with 35% down you should be able to get stronger lending terms, if the seller is workable you could entertain a concession towards a rate buy down for lower obligations, possibility to look at shorter duration (ARM) loans if you only intend to own 3-5 years which could also offer a lower rate.

On top of that, families have privacy, places to eat together and gather, plus entertainment options right in the home (pools and game rooms). 

sorry to say it but there is nothing dishonest to engage in a conversation with an Agent that has a house on market since 200 days and offer to buy at a lower offer price - seller they believe owns the Taj Mahal and expecially after pandemic they raise asking price way too high - once again, guys we are entertaining a conversation with a seller and if the house is on market since 200 days, guess what, I believe the agent and the seller maybe a bit motivated, or what? 

He said he hadn't given it much thought but would be willing to entertain a discussion.

The kitchen offers sleek stainless steel appliances, a spacious kitchen island complete with seating, a large pantry, and an adjacent dining area that provides plenty of space for entertaining.

They aren't tax savvy and neither are high income earners (both very low income/retired) and won't really entertain any savings strategies.

Possibly they are waiting 30-45 days after full transition before they begin entertaining price reductions.  

.* The preceding has been my opinion only, the views are my own, and are intended for educational and entertainment purposes only and does not constitute financial advice.

Have your Realtor contact the seller's Realtor and ask if they'd entertain a seller financed offer.These are rare and tough to close but they're out there.