Property Valuation
The 'principle of substitution' in real estate appraisal states that:
AA buyer will pay more for a unique property
BA buyer will not pay more for a property than the cost of acquiring a comparable substitute✓ Correct
CProperties in the same neighborhood always have the same value
DNew construction always exceeds the value of existing buildings
Explanation
The principle of substitution holds that the maximum value of a property tends to be set by the cost of acquiring an equally desirable substitute property. It underlies both the sales comparison and cost approaches.
Related Virginia Property Valuation Questions
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