Aceable Level 8 Practice Exam

Substitution is the idea that a buyer won’t pay more for a property than the cost of an equally desirable substitute. In practice, this means value is anchored by what buyers would pay for comparable properties in the same market. Appraisers use recent sale prices of similar homes and then adjust for differences in features, condition, and location. If a nearby comparable sold for less, the subject property’s value tends to align with that range, unless there are compelling reasons to justify a higher price. This principle underpins the sales comparison approach and explains why market value is driven by what buyers can obtain with comparable substitutes. The other statements describe different appraisal concepts (like market value versus list price, or specific calculations), not substitution.