Property Valuation
The principle of substitution in Maryland real estate appraisal states:
AOne property can always be substituted for another of equal value
BA buyer will pay no more for a property than the cost of acquiring an equally desirable substitute✓ Correct
CThe cost approach substitutes for the sales comparison approach
DIncome from one property can substitute for income from another
Explanation
The principle of substitution is fundamental to appraisal theory: a rational buyer will not pay more for a property than the cost to acquire a reasonably comparable alternative.
Related Maryland Property Valuation Questions
- The principle of progression states that a lower-value Maryland home located among higher-value homes will:
- USPAP requires a Maryland appraiser to maintain workfile records for at least:
- Land valuation in the cost approach uses:
- Which approach to value is most commonly used by SDAT to assess residential property in Maryland?
- The cost approach to value is MOST reliable for appraising:
- Which professional is required to perform an appraisal for a federally regulated mortgage transaction in Maryland?
- Functional obsolescence in a Maryland home would BEST be described as:
- An appraiser's estimate of value for a Maryland property found under the income approach is $600,000 and under the sales comparison approach is $620,000. In reconciliation for a residential property, the appraiser would most likely:
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