If you will be living at this place there is an emotional component which might justify you going higher in price to win the property.If this is an investment for long term buy and hold for rent income then it is less emotional and more about dollars and sense.Another factor is velocity of deal flow in your area.

Make sure you ask the auctioneer or trustee if you win the bid, do you get good title.Charles Parish.

But if the seller holds firm on asking price of 130k, what are some creative ways to structure owner financing that can be a win win?

Sometimes I'll lose, sometimes I'll win.

Try establishing a relationship/rapport first, determine motivation, and try to find a win/win deal based off what you uncover.  

This creates a WIN-WIN Situation and gives the Realtor incentive, to work harder on your behalf.

And if the refinanced lender forecloses the property, and up for sheriff sale, does the winning bidder responsible to the second mortgage.

I find it strange that some read "the sum of the parts is greater than the whole" to mean as an investor (or even a home owner) we have to win in every aspect of ownership or 'the sky is falling' starts to occur.One of the BIGGEST mistakes foisted upon the baby boomers was the notion that your home is an investment. 

The blue door is a definite win.

Here is the situation / story: After winning the property I paid for an in depth title research (yes I know this should be done ahead of time but often there is not enough time to do it before hand. so lets not discuss that aspect of it here.)