There is nothing to do here except to buy the place, if she is in foreclosure the lender wants their money, no installment deals, no convoluted creative stuff, just buy it. 

Next most creative deal are done to motivated sellers on non listed properties.

They are both open to some creative financing, I discussed owner financing with them and neither flinched.  

I’m in the process of preparing to buy my first property, but I have a question regarding property assessment calculations.

However, you aren't prepared for the outcome of those actions.

I am sure there is some creative way you can do this.

Hi @Adam WorthNote I'm not an expert negotiator but have been doing sales for a while now and since I'm still very young I'm noticing that the results you seek out of life comes down to how well you negotiate lol from buying a car, going on a date to everything (at least my experience lol) But this in one of the reasons I truly love Real Estate there's so much information out there for your disposal that you can justify the offer your going to make regardless the amount.Since he's your neighbor don't feel like you're going to insult him because you just never know what that person is going trough in closed doors a ridiculous offer just might make his day especially if he can't financially keep up with it or it's stressing the person out.Regardless just be prepared with facts baking up the offer your making, you can do this buy talking to a Realtor to get a CMA to see what has sold and get a ARV since his home is similar to yours, since you mentioned he overpaid this tells you that he might be underwater or have no equity this gives you an opportunity to ether lease option or some type of seller financing.

The attorney usually handles the closing, transfer of funds, putting on record, prepare HUD etc.

Any other steps you would recommend in getting prepared for that first deal?

You should also be prepared to produce an earnest money check.