Property Valuation
The principle of substitution in real estate appraisal holds that:
AA buyer will pay the same price for a property regardless of alternatives
BA rational buyer will pay no more for a property than the cost of an equally desirable substitute✓ Correct
CHigher-priced properties always appraise at higher values
DAppraisers must substitute comparable sales from other markets when local comps are unavailable
Explanation
The principle of substitution states that a rational buyer will not pay more for a property than the cost of acquiring an equally desirable substitute. This underlies the sales comparison approach.
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