What principle states that rational buyers will pay no more for a property than for an equally desirable, comparable property?

The principle of substitution is fundamental in real estate valuation as it asserts that a rational buyer will not pay more for one property than they would for another that is equally desirable and comparable. This means that if two properties have similar attributes such as location, size, and condition, a buyer will choose the less expensive option, thus establishing a market value for both properties based on what a buyer is willing to pay.

This principle serves as a basis for assessing property values without emotional influences, focusing instead on the characteristics and market comparability of the properties in question. It emphasizes that the value of a property is influenced by the available alternatives, ensuring that prices remain competitive in the market.

Other principles mentioned, such as appreciation, demand, and scarcity, are related to different aspects of market behavior. Appreciation relates to the increase in property value over time, demand pertains to the desire for a property which can affect its price, and scarcity addresses the limited availability of resources. However, none of these directly encapsulate the concept that buyers will evaluate the worth of a property against other similar options.