I would also remind them that they will incur additional interest, property taxes, etc if this deal falls through and that may remind them how much they want the property gone.Separately - If $3,500 is enough to potentially break your deal I would strongly consider whether the deal is good enough to begin with. 

It’s a good enough deal that I am willing to put in the work to try to get a settlement.

If the seller is being 'put off' by this question, it's a good enough reason not to take this deal.

Is the lite rail really a good enough of a draw to attract people and businesses to the area? 

If you pick 12%, 9% is not good enough, nor is 11.7%.

If you can use a bank it is usually cheaper interest than a hard money lender but if the deal is good enough paying a higher interest rate can get you started if you aren't able to get a loan from a bank or to cover the difference between the price and the amount the bank will loan you.

If you can tie it up for a good enough discount to value it can still work, but if its bank owned there's probably a no assignment clause in the contract.I've had people bring me "deals" for more than they were listed for. 

If the deal is good enough, an experienced investor will see it.

Even though they insist they only sell new ones, if you make it a good enough deal they might bite.

No more foreclosures since the margin isn't good enough anyways.