Property Valuation
The 'principle of substitution' in Florida real estate valuation states that:
AA buyer will pay more for a unique property that has no comparable
BA buyer will pay no more for a property than the cost of acquiring an equivalent substitute✓ Correct
COne property can be substituted for another in a 1031 exchange
DThe seller may substitute a different property if the original cannot be delivered
Explanation
The principle of substitution is foundational to all three appraisal approaches. It states that a prudent buyer will pay no more for a property than the cost of an equally desirable substitute property.
Related Florida Property Valuation Questions
- When using the sales comparison approach for a Florida home, an appraiser should use comparable sales that are generally:
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- Which principle states that when two properties are similar, the value of the more expensive property is affected negatively by its proximity to the less expensive property?
- When using the sales comparison approach, an appraiser adds value to a comparable sale when the comparable has:
- The 'principle of progression' in real estate means that:
- Which of the following is an example of 'external obsolescence' for a Florida home?
- When an appraiser considers 'physical depreciation' that is 'curable,' this means:
- In Florida, which type of property would most benefit from the 'cost approach' to valuation?
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