May 13 , 2016

Tampa School of Real Estate

Principal Of Substitution

Definition:   an economic law of value; no prudent buyer will pay more for a property than the cost of an equally desirable replacement property

Pronunciation:    \ˈprin(t)-s(ə-)pəl\ \ˌsəb-stə-ˈtü-shən\

Used in a Sentence:   The principal of substitution sets an upper limit of value for a property by establishing the cost of acquiring an equally desirable substitute property on the open market.

P