According to the Principal of Substitution, how much will a buyer pay for a property?

The Principle of Substitution states that a buyer will not pay more for a property than the cost to acquire an equally desirable substitute. This principle is foundational in real estate valuation, asserting that if similar properties are available at a lower price, a rational buyer will choose the less expensive option, guiding the market values for properties that are similar in nature and desirability.

When contemplating this principle, the focus is on the concept that the value of a property is influenced significantly by the potential to replace it with another property of equal utility and desirability. Therefore, the correct choice aligns with the idea that a buyer will pay based on what it would cost to secure a comparable property, ensuring that they do not overpay in the competitive marketplace.

The other choices reflect different valuation perspectives that do not adhere strictly to the Principle of Substitution.