The appraisal principle of substitution states that a buyer will pay no more for a property than the cost of acquiring an equally desirable substitute. Which of the following best reflects this principle?
Correct Answer
A) A buyer will pay no more than the cost of an equally desirable substitute property
The principle of substitution holds that a rational buyer will pay no more for a property than the cost of acquiring an equally desirable substitute. This principle is foundational to the sales comparison approach to appraisal, where comparable sales are used to estimate a subject property's value. The other options describe the principles of progression/regression (B), anticipation (C), and contribution (D).
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