Equity
The owner's value in a property, equal to its current market value minus the debt owed against it.
Quick flashcard
What does Equity mean on the Texas real estate exam?
Answer: The owner's value in a property, equal to its current market value minus the debt owed against it.
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Equity definition
Equity is the portion of a property's value the owner actually holds, found by subtracting the outstanding loan balance and other liens from the current market value. Equity grows as the loan is paid down and as the property appreciates.
Equity is not the same as profit. Profit also accounts for the costs of buying and selling.
Source basis
Definition checked against the official sources below on .
On the exam
Exam trap
Tested in
Value & Appraisal (11 of 80 National)
From definition to recall
See this term inside a real exam question.
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Try 5 free questionsThis definition is Texas real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.