Property Valuation
The principle of substitution states that a buyer will pay no more for a property than:
AThe seller's original cost plus improvements
BThe assessed value for tax purposes
CThe cost of acquiring an equally desirable substitute property✓ Correct
DThe appraised value from two years ago
Explanation
The principle of substitution underpins all three appraisal approaches: a rational buyer will not pay more than what it would cost to acquire an equivalent property.
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