The Principal of Substitution, which states that no one will pay more for one item if an equally substitutable item is available at a lower price, applies to what appraisal methods

Market Data Approach to appraisal

Explanation:

The Principal of Substitution, which states that no one will pay more for one item if an equally 'substitutable' item is available at a lower price, applies to market data approach appraisal method.

This principle holds that the highest amount that will be paid for a property is determined by the cost of buying a similar property of the same size, use, and that will generate the same amount of income.

Nobody will pay 1 million dollars for a property that he can buy for a half a million dollars elsewhere.