How to calculate equity and your maximum bid
Updated 2026-10-19 · 4 min read
Equity is the property's value minus the debt being foreclosed. A conservative maximum bid is value × 70% minus repairs and costs; stop bidding when the price reaches that number, even if the equity looks large.
The formulas
- Equity = market value − judgment (or upset price)
- Equity % = equity ÷ market value
- Maximum bid = market value × 70% − repair estimate − holding/closing costs
Worked example
- Market value (from comps): $320,000
- Judgment: $140,000 → equity $180,000 (56%)
- Repairs: $25,000, costs: $10,000
- Max bid = 320,000 × 0.70 − 25,000 − 10,000 = $189,000
Why not just bid up to the equity?
Because the "value" is an estimate, you can't inspect inside, and surviving liens, taxes or eviction costs eat the margin. The 30% cushion is your safety buffer.
Where EquityDrop helps
Every property page pre-fills the calculator with the published debt and the best public value we have (sheriff appraisal, OPA market value in Philadelphia, or NJ tax assessment), and the AI deal analyst explains the risks in plain English.
Questions people ask
What is a good equity percentage at auction?
Many investors look for 30%+ equity after estimated repairs, but it depends on the market, condition and your exit plan.
Is the tax assessment the market value?
Not always. In New Jersey, assessments are often below market. Use recent sold comps for the real value.
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General information, not legal or financial advice. Rules vary by county — confirm with the sheriff's office or an attorney.