Property Valuation
What is the principle of substitution in real estate?
AThe value of a property is set by the government
BA buyer will not pay more for a property than the cost of an equally desirable substitute✓ Correct
CProperties increase in value over time
DOlder properties are worth less than newer ones
Explanation
The principle of substitution holds that the maximum value of a property is set by the cost of acquiring an equivalent substitute, which is the foundation of the sales comparison and cost approaches.
Related North Carolina Property Valuation Questions
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