Buying a pre-forclosure from neighbor

[Jesse Hughes]

Hello All, 

I'm a complete newbie to this forum and have read a little bit to get started. I've been listening to the podcasts and have my eye out for deals and this situation just came up, for which I was hoping to get some advice (not sure I have time to do the research I need since the foreclosure proceedings are imminent. My father-in-law's neighbor is in pre-forclosure proceedings in Washington State. He hasn't paid mortgage in a year and a half. Here are the numbers:

142k principal balance

156k accelerated balance due to past due payments

Seller only wants 5k out of the deal, I offered 165k (redfin estimate is about 217k, for whatever that is worth)

Right now my only question is, how is the best way to go about this? a friend said I need a realtor to draft up paperwork which he said would cost about $500. I am planning on getting it financed, but aside from that, not sure the steps I should take.

Any advice in the right direction would be greatly appreciated. 

Thank you in advance!

V/r

Jesse