According to the principle of substitution, what will a reasonable purchaser consider?

The principle of substitution is a fundamental concept in property valuation, indicating that a rational buyer will not pay more for a property than the cost to obtain an equally desirable substitute property. This means that when assessing the value of a property, potential purchasers will primarily consider the market prices of similar properties that meet the same needs or desires.

When using the principle of substitution, buyers look for alternatives that offer similar utility, location, size, and other relevant characteristics. Therefore, the cost of acquiring an equally desirable property becomes a benchmark that influences the maximum price a buyer is willing to pay. If a similar property is available at a lower price, this inherent comparison will guide the purchaser's decision-making.

Other options may involve valid considerations in the purchasing process, such as the unique features of a property or local market trends. However, they do not align with the core idea behind the principle of substitution, which is fundamentally concerned with the comparative cost of similar properties rather than the unique aspects or external conditions influencing value.