Property Valuation
The principle of substitution in real estate valuation states that:
AA buyer will pay more for a property if it is unique
BValue is set by what a buyer would pay for an equally desirable substitute property✓ Correct
CThe replacement cost sets the maximum value for all properties
DProperties in the same market always sell for the same price
Explanation
The principle of substitution holds that a rational buyer will not pay more for a property than the cost of acquiring an equally desirable substitute. This principle underlies the sales comparison and cost approaches.
Related Wisconsin Property Valuation Questions
- A Wisconsin appraiser's final value estimate represents their:
- In Wisconsin, the assessed value is used for:
- Accrued depreciation in the cost approach includes all of the following EXCEPT:
- When reconciling values in a Wisconsin appraisal, the appraiser:
- The principle of conformity in Wisconsin real estate states that:
- The 'principle of contribution' in Wisconsin appraisal means:
- In Wisconsin, 'gross rent multiplier' (GRM) is calculated as:
- The cost approach to value is most reliable for:
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