ValuationAppraisal PrinciplesMEDIUM
In West Virginia, the principle of substitution states that a buyer will pay no more for a property than:
Correct Answer
B) The cost of acquiring a similar property with equal utility
The principle of substitution holds that a buyer will not pay more for a property than the cost of obtaining an equally desirable substitute. This underlies all three approaches to value (sales comparison, cost, and income).
Answer Options
A
The asking priceB
The cost of acquiring a similar property with equal utilityC
The tax-assessed valueD
The original construction costWhy This Is the Correct Answer
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Why the Other Options Are Wrong
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Deep Analysis of This Valuation Question
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Background Knowledge for Valuation
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Real World Application in Valuation
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Common Mistakes to Avoid on Valuation Questions
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Related Topics & Key Terms
Related Topics:
appraisal-foundationsmarket-valuecomparable-alternatives
Key Terms:
substitutionequal utilityrational buyerfoundationalwon't overpay
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