Final answer:
The blank should be filled with Comparative Market Analysis, a real estate valuation technique based on the principle of substitution. It involves comparing and adjusting the selling prices of similar properties to estimate a property's value.
Step-by-step explanation:
The blank in the question should be filled with the term Comparative Market Analysis (CMA), which is a technique used in real estate to determine the market value of a property. This process involves comparing similar properties that have recently sold, adjusting for differences to estimate the value of the subject property. Collecting data by checking the Real Estate section of your local newspaper for sale prices of homes is a practical way to begin a CMA.
When performing a CMA, real estate professionals will consider various factors such as location, property size, and condition while making adjustments to the selling prices of comparable properties. The principle of substitution implies that a buyer would not pay more for a property than the cost of an equivalent substitute. This principle is fundamental in determining real estate values and is particularly useful when valuing single-family homes, condominiums, and vacant lots.