Buying in foreclosure isn't without inherent risk. Make sure you know the area you are looking to buy in intimately. Even if you purchase at the right price there are many factors to consider as to whether or not you will have a profitable investment.
In both instances the "appraisals" are only estimates. As is stated on the zillow site their values are not professional appraisals and should not be taken as such. "Drive by" appraisals done by banks when doing refinancing tend to be extremely low and don't account for any upgrades that have been done inside the home. That can be a dramatic difference when comparing values. The best way is to have an independent appraisal and to have your value determined by an objective third party. I hope that helps....please feel free to contact me should you have any further questions.