Property Valuation
The principle of 'substitution' in real estate appraisal states that:
AA buyer will pay no more for a property than the cost of acquiring an equally desirable substitute✓ Correct
BProperties must be substituted when market conditions change
CAppraisers must substitute the income approach when the sales approach is unavailable
DLand value is always substituted for improvement value in the cost approach
Explanation
The principle of substitution is foundational to all three appraisal approaches. It holds that a prudent buyer will pay no more for a property than the cost of acquiring an equally desirable and functional substitute property.
Related New York Property Valuation Questions
- In New York, the 'income approach' to appraisal is most relevant for which type of property?
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