Property Valuation
The principle of substitution in Iowa appraisal states that:
AA buyer will pay more for a property than comparable alternatives
BA buyer will pay no more for a property than the cost of acquiring an equally desirable substitute✓ Correct
CLand value is determined by its highest and best use
DValue is created by anticipation of future benefits
Explanation
The principle of substitution holds that an informed buyer will not pay more for a property than the cost to obtain an equivalent substitute. This principle underlies the sales comparison and cost approaches.
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