ValuationAppraisal PrinciplesMEDIUM
Substitution principle:
Correct Answer
A) Pay no more than equally desirable substitute
Rational buyer won't overpay.
Answer Options
A
Pay no more than equally desirable substituteB
Location most importantC
Values always riseD
Highest offer winsWhy 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:
Sales comparison approachCost approachPrinciple of contributionPrinciple of anticipationMarket value definitionNebraska agricultural land appraisalUSPAP
Key Terms:
substitutionappraisal principlesales comparison approachvalue ceilingrational buyerequally desirable substituteNebraskaagricultural landcost approachUSPAP
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More Valuation Questions
The appraisal principle of substitution states that:
Physical deterioration, functional obsolescence, and external obsolescence are the three types of:
Highest and best use means the use that is:
In the sales comparison approach, adjustments are always made to the:
The sales comparison approach to appraisal is most commonly used for which type of property?
- → Which formula best represents the cost approach to appraisal?
- → Which appraisal method is most commonly used for residential properties and relies on recent sales of comparable properties?
- → The sales comparison approach to appraisal is most commonly used for which type of property?
- → The sales comparison approach to appraisal is most appropriate for which type of property?
- → A West Virginia property with 4 bedrooms but only 1 bathroom suffers from:
- → A Comparative Market Analysis (CMA) is best described as:
- → James owns a farm in rural Tennessee that qualifies for the Greenbelt Law. Under Tennessee's Greenbelt Law, how is agricultural land assessed for property tax purposes?
- → Which of the following correctly identifies the three types of depreciation recognized in real estate appraisal?
- → Which four criteria must a use satisfy to qualify as the highest and best use of a property?
- → Highest and best use: