Which statement accurately reflects property flipping fraud?

Property flipping fraud refers to the unethical practice of purchasing a property, often at a low price, making superficial improvements to increase its perceived value, and then quickly reselling it at a significantly inflated price. The key aspect of this fraud lies in the manipulation of appraisal information to justify the inflated selling price.

When the appraisal information is fraudulent—meaning that the appraisal does not accurately reflect the property's true market value, often due to collusion between the buyer, seller, and appraiser—it becomes illegal. This situation can lead to significant financial harm for unwitting buyers who may be overpaying for a property based on manipulated data.

Understanding this context clarifies why the correct answer focuses on the consequences of fraudulent appraisal information. Legitimate transactions with honest appraisals do not constitute fraud, and legal property flipping involves transparency and full disclosure of any improvements made. In contrast, scenarios that benefit both buyer and seller equally do not align with the nature of flipping fraud, which inherently disadvantages one party based on misleading information.