Property Valuation
Principles of value state that value is created by the interaction of supply and demand. Which principle holds that value is influenced by what a prudent buyer would pay for a similar property?
APrinciple of substitution✓ Correct
BPrinciple of conformity
CPrinciple of progression
DPrinciple of contribution
Explanation
The principle of substitution states that a buyer will pay no more for a property than the cost of acquiring a comparable substitute. This principle is the foundation of the sales comparison approach to value.
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