Trying to determine the best way to negotiate the property because I believe he still has a mortgage on it I don't see a discharge of the mortgage in the records, but that also brings up a question for me as to how can I offer a lower amount of the property than what he owes on it.

second just have the family give you a loan like any other lender secured by the property. at an interest rate you negotiate.. refinance and payoff lump sum.. 

I assume MV means competing with the current houses on the market and what they are asking/negotiating based on.

If you are a strong negotiator you will get close to what you want to pay or walk away from the deal without giving it a second thought.Spell out on paper why your offer is where it is to soften the blow to the sellers agent.

@Branden SewellOther than having private investors , the only other way to not have capital (or at least a lot of capital)Is to negotiate terms with the seller.

Is the final number negotiable at all?

Is there room for negotiation or compromise?

My question is has anyone done this type of negotiation before with the seller's bank? 

You will want to negotiate a move-out plan that will be the least stressful and most efficient for all parties involved.If you want the renter out because they're a really bad tenant (not paying rent, causing property damage, disrespectful, and/or dangerous), then do so as quickly as you can, with the help of legal counsel.

You have to look for and negotiate them.