Alberta Real Estate Licensing Exam Practice · Question
What is 'equity' in the context of residential real estate?
Equity is the portion of the property's value that the owner truly owns, calculated as market value minus liabilities.
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Question: What is 'equity' in the context of residential real estate?
Answer options:
- The total amount owed on a mortgage ✅ The market value of a property minus any outstanding loans or liens
- The amount of the initial down payment
- The interest paid on a mortgage over its lifetime
Correct answer: The market value of a property minus any outstanding loans or liens
Explanation: Equity is the portion of the property's value that the owner truly owns, calculated as market value minus liabilities.
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