Property Valuation
The principle of substitution states that:
AA buyer will pay more for a property because it is unique
BA buyer will not pay more for a property than the cost of acquiring a comparable substitute✓ Correct
CProperty values tend to rise over time
DLand value is always greater than improvement value
Explanation
The principle of substitution is the foundation of all three appraisal approaches — a buyer will not pay more for a property than it would cost to acquire an equally desirable substitute.
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