My first lease option offer denied - Any advice on next steps

So I put in an offer to a seller who seemed to be pretty motivated (middle age couple, new baby, had moved out of the area, ready to be done with the house). They offered the house for 139,000 and had consistantly received $1100 a month rent for the last 5 years or so. I offered 900 a month rent with a 5 year lease with $50 of that going to pay down the sale price of $124,000. The 124,000 was the average of,, and The seller thought that $124,000 was too low and didn’t feel comfortable locking in 124,000 for 5 years. She also thought that with a lease option (she did some research after I made the offer) that I should put down a down payment (and she may have a good point since a lot of lease options do that that).

Did I structure the deal wrong? Should I not have added in the $50 per month to pay down the sale price? Are there any other pieces of advice that anyone here would have? Thanks a lot.

Matt, is the property currently rented? If so, what’s their motivation for renting to you, and at a price that is $200/mo less than they have been receiving?

Good question,
The property is not currently rented. They are between renters but don’t seem to have a problem finding renters at 1100. I guess the motivation would be not having to drive an hour or so to interview/show the house, and do repairs. I thought that they might be tired of being landlords but I think I overestimated their desire to be done with the house. In following up with her, she says that her expenses are about 1000 a month and probably can’t go any lower than that in rent and wouldn’t go any lower than 135,000 sale price. This probably just isn’t the deal we’re looking for.