Property Valuation
The principle of substitution in appraisal states that:
AA property is worth more when substituted for another property
BA buyer will pay no more for a property than the cost of an equally desirable substitute✓ Correct
CProperties can be substituted for one another in a 1031 exchange
DAppraisers can substitute one method for another
Explanation
The principle of substitution states that the maximum value of a property is set by the cost of acquiring an equally desirable substitute property. This principle underlies all three approaches to value.
Related Arizona Property Valuation Questions
- Accrued depreciation in the cost approach refers to:
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