|Principle of Substitution (Principe de substitution)||
In the appraisal of Real Estate the principle of Substitution (Cost, Income Capitalization & Comparison Approaches) states that a potential owner will pay no more for a property than the amount for which a property of like utility may be purchased; that a property's value tends to be set by the cost of acquiring an equally desirable substitute. The principle of substitution states that no buyer will pay more for a good than he or she would have to pay to acquire an acceptable substitute of equal utility in an equivalent amount of time.
88 Prince Street, Suite 201
Montreal, Quebec H3C 2M8