Property Valuation
The principle of substitution in Missouri appraisal states that:
AA buyer will pay more for a superior property
BA property's value is set by the cost of acquiring an equally desirable substitute✓ Correct
CValue is determined only by location
DImprovements always add value equal to their cost
Explanation
The principle of substitution holds that a rational buyer will pay no more for a property than the cost of acquiring a comparable substitute. It is the foundation of the sales comparison approach.
Related Missouri Property Valuation Questions
- In Missouri, a property's assessed value for tax purposes is appealed to the county Board of Equalization. The BOE's decision may be further appealed to the:
- A 'broker price opinion' (BPO) in Missouri is:
- In Missouri, 'interim value' of land during development refers to:
- A Missouri seller's market is characterized by:
- An appraisal report in Missouri must conform to standards set by:
- A Missouri home has a replacement cost new of $220,000, total depreciation of 25%, and land value of $50,000. What is the cost approach value?
- In Missouri, 'comparable sales' used in the sales comparison approach should be:
- A Missouri appraiser concludes a value of $285,000. They note that the sales comparison approach was given the most weight because:
Practice More Missouri Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Missouri Quiz →