Flipped houses and second appraisals

So, you’ve been watching HGTV lately and thinking about flipped houses. It seems like everyone wants to get in on the craze of buying a house, making a few improvements to it, and then selling it for a huge profit. You begin to wonder; do all flipped houses require a second appraisal?

Well, this Q&A from the CFPB provides that “[i]f the home you’re buying is considered a “flip” and you’re getting a higher-priced mortgage loan covered… you will have to get a second appraisal.” (Emphasis added). Per the CFPB, a “flip” is when:

“You buy a home from a seller who bought the home less than six months ago and;

You pay a certain amount more than the seller paid for the home:

10 percent more if the seller bought the home within the past 90 days.

20 percent more if the seller bought the home in the past 91 to 180 days.”


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