Property Valuation (alternative)
The principle of substitution in Maryland appraisal theory states that:
AAll properties in a neighborhood should sell for the same price
BA buyer will not pay more for a property than the cost of acquiring an equally desirable substitute✓ Correct
CProperty values always increase over time
DDepreciation eliminates value differences between properties
Explanation
The principle of substitution holds that a rational buyer will not pay more for a property than the cost of purchasing an equally desirable and available substitute—the foundation of the sales comparison approach.
Related Maryland Property Valuation (alternative) Questions
- When appraising Maryland waterfront property, the premium over a non-waterfront comparable is:
- In Maryland, the difference between market value and investment value is that:
- In Maryland, the principle of 'balance' in appraisal theory states that:
- An appraiser in Maryland who finds that a comparable sale occurred between related parties (family members) should:
- In Maryland appraisal, 'market conditions' adjustment to comparable sales reflects:
- In Maryland, the 'economic rent' of a property refers to:
- When appraising a Maryland property, which factor makes a comparable sale the LEAST useful?
- For a Maryland property near the Washington DC suburbs with high demand, a 'market rent' analysis would use:
Practice More Maryland Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Maryland Quiz →