Loan Officer Practice Exam

To address the problem of illegal property flipping, appraisers must analyze the transfer history of a subject property for how many years?

1. Three months

2. Eighteen months

3. One year

4. Three years

The correct answer is: Three years

To ensure accuracy in property valuations and to combat the issue of illegal property flipping, appraisers are required to examine the transfer history of a subject property. This includes scrutinizing how many times the property has changed hands over a designated period. Analyzing the transfer history for three years allows appraisers to identify patterns that may suggest illegal flipping, such as frequent sales or significant price increases that do not align with market trends. By considering a longer timeframe, appraisers can gather comprehensive data that paints a clearer picture of the property's valuation history, assess the legitimacy of involved transactions, and determine whether the property's price reflects its true market value based on historical trends. In contrast, shorter timeframes like three months, eighteen months, or one year do not provide sufficient data to fully understand trends or potentially fraudulent activity in property sales. Thus, three years is the correct duration for appraisers to analyze the transfer history of a subject property effectively.