Property Valuation
The principle of substitution in real estate appraisal states:
ABuyers will always substitute newer properties for older ones
BA buyer will pay no more for a property than the cost of acquiring an equally desirable substitute✓ Correct
COne property can substitute for another in all circumstances
DAppraisers may substitute comparable sales from different markets
Explanation
The principle of substitution is the foundation of all three appraisal approaches. It states that a knowledgeable buyer will pay no more for a property than the cost of acquiring a similar, equally desirable property in the current market.
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