Property Valuation
The principle that no prudent buyer will pay more for a property than the cost to build a comparable new structure is called:
AContribution
BSubstitution✓ Correct
CSupply and demand
DConformity
Explanation
The principle of substitution underlies the cost approach—if you can build a comparable property for $X, you won't pay more than $X for the existing property, all else being equal.
Related Connecticut Property Valuation Questions
- An appraiser using the cost approach to value a property would:
- In the Connecticut sales comparison approach, an adjustment for a larger garage at the subject property compared to a comparable is a:
- When using the sales comparison approach, an appraiser makes adjustments to comparables to account for differences with the subject property. If a comparable has a feature the subject lacks, the adjustment to the comparable is:
- Which is true about a 'competitive market analysis' (CMA) prepared by a Connecticut real estate licensee?
- The highest and best use of a property is defined as the use that is:
- In appraising an older industrial building in Connecticut, which approach would an appraiser MOST likely use?
- The sales comparison approach to value is most commonly used to appraise:
- In the sales comparison approach, a comparable sale that sold 18 months ago would typically require:
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