Seeking help putting together a Closing Statement (cash deal) without help from an agent or attorney

[Derek Martin]

I am in the process of purchasing my neighbor's home for cash. It is very inexpensive and needs tons of rehab. The neighbor and I have agreed upon a price. The only real hiccup is that the property has a very large lien on it. I have been in constant contact with the lienholder (a govt agency) and they have agreed (verbally) to accept a much lesser amount. They have requested that I send them a Settlement Statement detailing the entire agreement. I'm not sure how to do this.

(1) Would you recommend using a HUD-1 or writing up my own statement?

(2) I am paying all $4000 of the seller's back taxes? How should this be structured? Should the total price be inflated by that amount and $4000 listed as a credit to buyer?

(3) Same for the lien...how would you recommend listing this on the closing statement?

This is a great win-win for both the seller and myself. I'm really excited to close on this so your help is GREATLY appreciated.

[Joel Owens]

You are not using a title company?? In some states it is required that transactions are closed by an attorney.

What the government agency is asking for is a pre-lim HUD 1 statement. This shows nothing paid to seller and has a line showing lien amount to be paid at closing to the gov't agency.

It's important to understand that the gov't agency is likely taking a small amount to release the lien interest BUT reserve the right to pursue the seller for additional money owed on the balance.

The lien release interest letter will specify a certain date the payoff amount is good for to release the lien.

No legal advice.