Property Valuation
The principle of substitution states that a buyer will pay no more for a property than:
AIts assessed value
BThe cost of acquiring an equally desirable substitute property✓ Correct
CThe seller's asking price
DThe average value of similar properties in the area
Explanation
The principle of substitution is the foundation of the sales comparison and cost approaches: a buyer will not pay more than the cost of an equivalent substitute.
Related Maryland Property Valuation Questions
- A Maryland appraiser preparing a restricted appraisal report versus a full appraisal report provides:
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