Property Valuation
What is the principle of substitution in real estate appraisal?
AA buyer will pay more for a unique property
BA buyer will not pay more for a property than the cost of acquiring an equally desirable substitute✓ Correct
CProperties of similar size should have similar values
DThe value of a property is determined by its highest use
Explanation
The principle of substitution holds that a buyer will not pay more for a property than the cost of acquiring an equally desirable substitute, forming the foundation for the sales comparison approach.
Related Ohio Property Valuation Questions
- When appraising an older historic home in a Cleveland neighborhood, the appraiser finds significant physical deterioration. This is classified as:
- In Ohio, the county auditor's assessed value is used to determine:
- What does 'effective age' mean in an appraisal?
- Which principle states that the value of an improvement is only worth the amount it adds to the total property value?
- When an Ohio appraiser reconciles multiple value indications, the FINAL value conclusion is:
- An Ohio appraiser makes a '+$5,000' adjustment to a comparable sale. This means the comparable:
- In Ohio, a 'retrospective appraisal' is one where the effective date of value is:
- If an Ohio property's NOI is $50,000 and it sells at a 6.25% cap rate, what is the sale price?
Practice More Ohio Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Ohio Quiz →