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Estimated Increase In Equity
An estimated increase in equity refers to a substantial increase in value on a property over the course of a selected amount of years, or in other words, the amount of money a property is estimated to gain while in possession of an owner. For example, if a buyer purchases a home for $100,000 and plans to keep the home for 10 years, the estimated increase in equity is however much he or she believes the property will increase in value over 10 years. If he or she believes the property will increase to $150,000 in 10 years, then the estimated increase in equity is $50,000. Keep in mind that the property can also decrease in value during this time, and negative equity or a loss of worth to the property can also exist.