Valuation & AppraisalQuestion 52 of 120
The appraisal principle stating that a buyer will pay no more for a property than the cost of an equally desirable substitute is the principle of:
a.Conformity
b.Anticipation
c.Contribution
d.Substitution
Explanation
The principle of substitution holds that value is set by the cost of acquiring an equally desirable substitute property. It underlies the sales comparison approach, since a buyer will not pay more than comparable alternatives cost. This principle links all three appraisal approaches.
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