How much can I realistically save on a forclosure?

**kingsofstate** · 11-17-2011, 04:42 PM

My Wife and I are planning on buying our first home in the Colorado Springs area. We are looking for the perfect investment and want to buy a forclosure that also needs to be fixed up. Our Idea is to buy the perfect flip as our first home, that way if we loose some money its not a huge issue since we will be living in the home for several years.
My question is how much off of market value can I expect on a forclosure? Is 20-30 percent under current appraisal value too much to expect? My plan is to use the instand equity as the value amount to use for fixing it up. For instance if the house is selling for 150 but appraised at 170, I would try to allocate only 20k for the reno budget, that way at the very least I should break even. Thanks for the advice! Also if there are any realtors in the springs area who specialize in investment / forclosure properties Id love to hear from you.

**Greg** · 11-18-2011, 06:01 AM

All the foreclosure sales I have been involved in have appraised at or near the contract price. Don't expect to see an appraisal $20,000 over your contract.

**Chris Kukelhan** · 11-18-2011, 07:43 AM

Typically the home is going to appraise for the contract price. You may want to hire an independent appraiser or find a really good agent to help you determine the value, prior to making your offer. Don't pay much attention to the list price. Many times these homes sell for much more than what they are listed at.