Property Valuation
The principle of substitution states that a buyer will pay no more for a property than:
AThe original cost of construction
BThe price of an equally desirable substitute property✓ Correct
CThe assessed value set by the town
DThe appraised value from five years ago
Explanation
The principle of substitution is the basis of all three appraisal approaches: a prudent buyer will not pay more for a property than the cost of acquiring an equally desirable substitute.
Related Connecticut Property Valuation Questions
- In the income approach, 'operating expenses' typically include all of the following EXCEPT:
- An appraiser completing a Connecticut FHA appraisal must ensure the property meets:
- The term 'absorption rate' in Connecticut real estate refers to:
- A Connecticut appraiser is appraising a single-family home and has four comparable sales. Which adjustment principle applies when a comparable has a feature that the subject property lacks?
- Which of the following is most likely to DECREASE a property's value through external obsolescence?
- Which appraisal principle states that the value of a property is affected by the values of neighboring properties?
- When using the cost approach for appraisal, 'accrued depreciation' refers to:
- In Connecticut, a property owner who disagrees with their assessment may file an appeal with the:
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