@Barry H.Just to clarify what Steven Hamilton is saying:There are two general rules that must be met for a fully tax deferred 1031 forward exchangeThe value of the replacement property must equal or exceed the value of the relinquished property.All of the net proceeds from the sale of the relinquished property must be applied to the acquisition of the replacement property.Selling your property for $2M and acquiring a $5M replacement property satisfies the first rule.The net proceeds from the sale of the relinquished property is the amount of the check that you would have received at settlement after all the selling expenses are paid, liens are satisfied, seller concessions are funded, and other closing costs are paid.

This is standard business practice - just look up how many settlements the SEC makes annually where companies pay millions in penalties WITHOUT ADMITTING to any wrong doing.- Cash-for-Keys is another example of this!

So, hence my interest in trying to buy the redemption rights to anticipate the settlement of the deed.

If you find a 25K note and get a seller to agree to take 10K and then arrange a purchase from a dealer or anyone else say at 15K and they use that money at the settlement, you are not buying with your money, you are brokering.

Some of those expenses would have been considered normal direct expenses related to the purchase and placed on the settlement statement where they could have been paid.  

Most contracts say that you get free and clear title so the bills come out of the price you offer and the bills are the seller s responsibility (actually usually paid by the title company at settlement)However depending on the situation especially if the seller is very motivated and doesn't even know what he or she owes I will give them a net offer.

Dude told me he had bad tenants and he wanted to hire us to takeover management and negotiate a cash for keys settlement with current tenants, then get him some new ones.

In our martial settlement agreement we agreed I would keep the homes, they were awarded to me in the divorce and my ex signed the deeds over to me.

If you used your own investor super duper buyer friendly whiz bang contract and left out such damages, then the seller will be free to seek what ever damages may apply and justified by some attorney under state law that could end up being more than the usually agreed to penalties.I suggest you go to the lender and ask to see a blank note if you really must.The problem could arise since you don't really know what customary terms are that you'll form an uninformed opinion and just get cold feet.You will have three days prior to settlement to review documents, nothing will be changed unless there is an error.

I have done tax defer settlement setups for sellers before.