Property Valuation
The principle of substitution in Vermont real estate valuation states that:
ABuyers will always choose the lowest-priced property
BA buyer will pay no more for a property than the cost of an equivalent substitute property✓ Correct
CProperties must be appraised before sale
DValue is created by anticipated future benefits
Explanation
The principle of substitution underlies the sales comparison and cost approaches: a rational buyer will not pay more for a property than the cost of obtaining an equally desirable substitute.
Related Vermont Property Valuation Questions
- Vermont's 'reconciliation' in an appraisal report refers to:
- In Vermont appraisal, the cost approach is MOST reliable for valuing:
- In a Vermont appraisal using the income approach, which formula directly links net operating income to value?
- In Vermont's rural market, which appraisal approach is typically given the most weight for single-family residential properties?
- A Vermont appraiser who finds no truly similar recent sales must widen their search area. What is the key adjustment consideration when using a comparable from a different Vermont market area (e.g., using a Burlington suburb comp for a rural Northeast Kingdom property)?
- Vermont's listers assess property values for:
- The cost approach to real estate valuation estimates value by:
- Vermont's 'marketability' analysis in appraisal examines:
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