We’ve all heard of the real estate investor, or even the regular homebuyer that experiences a sudden fall in the value of their property and as a result, finds themselves with something called negative equity. What exactly is “negative equity” and how does one find them self in the position of having it? When we discover how it occurs we can hopefully do our best to avoid it.

First, let’s look at the concept of Equity. Put simply, Equity is ownership. If you completely own your property, you have 100% equity in that property. The value of this equity is equal to the current value of your property.

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