The Londoners have reportedly demanded around £40 million for the midfield genius with several clubs like city rivals Chelsea and Manchester United favourites to sign the Croatian star.
But the Spanish side are confident on signing the 26-year-old.
"Everything has been resolved. Luka and Real Madrid agree on everything. There is a little more difficulty with the position of Tottenham but everything will be solved and will be resolved quickly," sources close to Modric were quoted as saying in Goal.com.
Meanwhile, Modric was all set to make a move to Chelsea during the January transfer window last season. But Spurs' Chairman Daniel Levy was unwilling to reduce the asking for their most impressive player.
Manager Harry Redknapp was sacked following a series of poor results which brought them down from third to fourth. But Tottenham won't play in the Champions League because Chelsea won it and will automatically qualify despite being fifth in the Premier League standings.
Manchester United are no longer in the running to sign Modric after signing Shinji Kagawa from Borussia Dortmund. Sources say the Old Trafford club refused to Spurs £40 million offer but were ready to bid with £30 million.
Modric insisted he wants to play in the Champions League and win the competition and with Spurs only playing in the Europa League, Modric has the luxury to choose offers from various clubs across Europe. Newly appointed manager Andre Villas-Boas has an uphill task to convince several stars like Gareth Bale, Rafael van der Vaart after top clubs have shown their interest and are ready to meet the clubs valuation for their players.