Any suggestions on this Vendor Finance transaction…

the situation is like a Mortgage Repossession:

The property was in litigation since 2009 and it just came of the litigation in october 2012. Because it was in litigation the owner did not have to pay any payments to the bank during the litigation period.

Now the property is in the possession of the bank but the bank is letting the owner/people stay for certain period upto Jan 2013. The bank has also instructed the people to sell it and they are trying to sell it @$250k since 1.5 yr and hasn't been sold.

Obviously, Bank wants its money atleast now as it's been sitting on their books since 2009 as Non-Performing Asset. I am thinking the Bank would be flexible to negotiate to get the property of its Books rather than carry it much forward.

Lot size – 3188sqm

Just the Land Value – $49k

The property is worth around $210k (according to RP and they have given a range up to $230k)

Bank wants $200k to discharge the mortgage.

I was thinking to Vendor finance the deposit to the coming in buyer and the buyer gets the other part as a loan from their lender.

What do you think is best to do in this scenario – 

I should first option the property and then go to the Bank and negotiate?

Or

I should get a "Deed of priority"/"power of attorney" and then go to the Bank and negotiate?

Or

I should mention in my Option contract with the seller that whatever the Bank charges to discharge the mortgage I will agree that price.

Any suggestions for this are very much appreciated…

tx