The appraisal principle of substitution states that:
Correct Answer
A) A buyer will pay no more for a property than the cost of acquiring an equally desirable substitute
The principle of substitution holds 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 the sales comparison approach to appraisal, as it assumes buyers compare similar properties and will not overpay when comparable alternatives exist in the market.
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