A second appraisal must be conducted if a property was sold at a price increase of more than what percentage and within what time frame?

The requirement for a second appraisal being conducted is tied to the increased sale price of a property and the time frame in which that sale occurs. A property sold at a price increase of more than 20% and within the time frame of 90 to 181 days triggers the need for a second appraisal. This rule is primarily in place to ensure that appraisals remain accurate and reflective of current market conditions, thereby protecting lenders from overestimating property values based on substantial price increases in a short period.

In this scenario, the specified percentage of 20% indicates a significant appreciation of the property value that warrants additional scrutiny. The specified time frame is also critical, as it aligns with lending guidelines designed to prevent potential fraud and to ensure that the property's market price has stability before approving a mortgage based on that appraisal. When properties experience rapid appreciation, additional verification through a second appraisal can help to protect all parties involved in the transaction.