The appraisal principle of substitution holds that a prudent buyer will pay no more for a property than the cost of acquiring an equally desirable substitute. Which of the following best describes this principle?
Correct Answer
A) A buyer will pay no more for a property than the price of an equally desirable substitute
The principle of substitution states that a rational, informed buyer will pay no more for a property than the cost of acquiring an equally desirable and available substitute property. This principle underlies all three approaches to value used in appraisal. The other options describe the principles of contribution (B), progression (C), and anticipation (D).
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