Property Valuation
The principle of substitution in real estate appraisal states that:
AA property's value is created by its anticipated future benefits
BA buyer will not pay more for a property than the cost of acquiring a similar substitute✓ Correct
CValue is determined by government assessment
DProperties must be compared only to those sold within the past 90 days
Explanation
The principle of substitution is the foundation of all three appraisal approaches. It holds that a rational buyer will not pay more for a property than the cost of acquiring an equally desirable substitute property.
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