Thinking of flipping a property? Keep reading…
When the seller has held title for less than or equal to 90 days, the maximum increase in value over acquisition is 10%. If the increase exceeds 10%, a 2nd appraisal will need to be ordered and all improvements made to the home will need to be documented to support the increase. If improvements have not been made or cannot be adequately documented, the increase will not be allowed.
When the seller has been on title for 91-180 days, an increase greater than 20% will require a 2nd appraisal and/or documented improvements.
When the seller has been on title for more than 12 months and the value has increased more than 5%, underwriter discretion will be used to determine whether a 2nd appraisal and/or documentation of improvements is necessary.
Thanks to Ari Berman at Silverton Mortgage for this helpful tip!