Property Valuation
The principle of substitution in Indiana real estate appraisal holds that:
AOne property can substitute for another in the same market
BA buyer will pay no more for a property than the cost of acquiring an equally desirable substitute✓ Correct
CImprovements can substitute for land value
DDepreciation substitutes for market value
Explanation
The principle of substitution is the foundation of all three approaches to value. Buyers will not pay more than the cost of acquiring an equivalent substitute property, whether through purchase, construction, or leasing.
Related Indiana Property Valuation Questions
- The cost approach to value estimates property value by:
- Exposure time in an Indiana appraisal is defined as:
- The cost approach to valuation uses the formula:
- In Indiana, 'market value' as used in appraisal is best defined as:
- An Indiana appraiser must adhere to which set of professional standards?
- In Indiana, a comparative market analysis (CMA) is performed by:
- Physical deterioration that can be repaired or corrected economically is called:
- Reconciliation in an appraisal is the process of:
Practice More Indiana Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Indiana Quiz →