What is the difference between the market value of a property and the amount of outstanding debt against the property?

The difference between the market value of a property and the outstanding debt against the property is referred to as equity. Equity represents the owner's stake in the property and is calculated by subtracting any liabilities, such as mortgages or other loans, from the property's current market value. For instance, if a property has a market value of $300,000 and there is $200,000 owed on the mortgage, the equity in the property would be $100,000.

Understanding equity is crucial for homeowners and potential buyers as it reflects wealth accumulation over time and can influence decisions regarding refinancing, selling, or leveraging the property for additional loans.

In this context, the other terms provided do not accurately describe this difference. Net asset value typically refers to a company's total assets minus its total liabilities, which while conceptually similar, is more often used in business contexts rather than real estate. Market price might refer to the actual sale price of a property at a given time, which does not take outstanding debts into account. Property assessment relates to the valuation of the property for tax purposes, but it does not directly represent the equity or the relationship between market value and debt.