The appraisal principle that states that the value of a property tends to be influenced by the price of acquiring an equally desirable property:

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The principle of substitution states that the value of a property is affected by the cost of acquiring an equally desirable property. If there are two properties with similar features, a buyer will not pay more for one property than the cost of acquiring the other property. Additionally, buyers will only pay the lowest price for a property that a seller is willing to accept, so the principle of substitution helps to establish realistic property values.

The Appraisal Principle That States That the Value of a Property