Property Valuation
The 'principle of substitution' underpins which appraisal approach?
ACost approach only
BIncome approach only
CSales comparison approach only
DAll three appraisal approaches✓ Correct
Explanation
The principle of substitution — that a buyer will pay no more for a property than the cost of acquiring an equally desirable substitute — underpins all three appraisal approaches: sales comparison (comparable sales), cost (cost to build equivalent), and income (alternative investments).
Related North Carolina Property Valuation Questions
- An adjustment in the sales comparison approach for a feature the subject property HAS but the comparable does NOT have requires the appraiser to:
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