ValuationAppraisal PrinciplesMEDIUM
The appraisal principle of substitution states that a buyer will pay no more for a property than:
Correct Answer
A) The cost of acquiring an equally desirable substitute property
The principle of substitution holds that a buyer will pay no more for a property than the cost of acquiring an equally desirable substitute property. This principle underlies the sales comparison and cost approaches to value.
Answer Options
A
The cost of acquiring an equally desirable substitute propertyB
The value added by any single component as determined by the principle of contributionC
The increased value resulting from the principle of progressionD
The value established by the property's highest and best useWhy 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 progressionhighest and best use
Key Terms:
substitutionequally desirable substitutesales comparison approachcost approachappraisal principles
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The appraisal principle of substitution states that:
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