Tidewater VA appraisal
Tidewater initiative is the name given to a process for VA Home Appraisers. The appraiser declares this initiative or process when their opinion of value is lower than the contract price. Buyers and sellers agree to the contract price. The buyer is pursuing a VA guaranteed mortgage loan.
A declaration of the Tidewater Initiative allows a short period to reconsider the value. Interested parties can challenge the appraisal and supply more information. Interested parties may also prove any mistakes in the appraiser’s current work.
Low appraisals do happen in association with other loans. When an appraiser agrees to reassess a previous value, it is a reconsideration of value. There is no official trigger that starts this process. Appraisers may refuse to reconsider their opinion of value. Realtors do their best to support the contract price. The process is a ‘tidewater appraisal.’ Influencing the appraiser has negative consequences. Appraisers want people to refrain from telling them how to do their jobs. A Realtor’s support of the value is a tactic to influence the value of the appraisal.
If the extra information doesn’t support any more value, the appraiser must write a letter. The letter explains why there are no reasons for changing the opinion of value.
The Tidewater Initiative is a formatted process. The process allows the lender to provide more information. Lenders can also find errors in the current valuation. Lenders often ask Realtors for help with the process. The Tidewater Initiative is the method that VA appraisers use to allow more information. When the evidence warrants adding more value, appraisers will comply.
Do other lenders have the ability to invoke the Tidewater Initiative?
All lenders do not have a similar process as the VA Tidewater Initiative. Real estate contracts should be more sophisticated. Many contracts state that the sale is subject to an appraisal. The appraised value must be equal to the contract price or higher. The Tidewater process tells the appraiser to notify the interested parties if the house doesn’t appraise. A short period allows the appraiser adjusts the price. If the price isn’t adjusted, the buyer must pay the difference in cash. If there is no agreement to proceed, the contract cancels. Realtors often provide evidence that supports the value. Giving more information is a method for avoiding a low appraisal
Tidewater real estate term
The classic definition of ‘tidewater’ is the land affected by the tide and the water associated with the land-water boundary. The real estate term, tidewater, is associates with the Tidewater Initiative. Veterans Administration guaranteed mortgage loans offer this process to VA appraisers. Some wonder, “What is a tidewater appraisal?”. The Tidewater initiative is a process that a VA-approved appraiser can invoke. This process allows extra information before the appraiser completes their work.
What is a Reconsideration of Value?
When parties challenge appraisals, appraisers may reconsider their valuation. The name of the process is Reconsideration of Value (ROV). There are official and unofficial ways to request ROV. Interested parties provide extra information or challenge existing information. Comparable sales to increase the appraised valuation.
What happens to your deposit if the house doesn’t appraise for the contract price?
The Department of Veterans Affairs states the following: “It is expressly agreed that, notwithstanding any other provisions of this contract, the purchaser shall not incur any penalty by forfeiture of earnest money or otherwise or be obligated to complete the purchase of the property described herein, if the contract purchase price or cost exceeds the reasonable value of the property established by the Department of Veterans Affairs. The purchaser shall, however, have the privilege and option of proceeding with the consummation of this contract without regard to the amount of the reasonable value established by the Department of Veterans Affairs. (Authority: 38 U.S.C. 501, 3703(c)(1))”
If you pursue a VA loan, you need to use this disclosure. The VA requires the return of your earnest money. if the house doesn’t appraise. Each state mandates the treatment of deposits, earnest money, and due diligence money. Consult with your agent or attorney about proper contract use in your state.
Conclusion
In recent times, home values have accelerated. Values have often increased faster than the sales comparable evidence showed. The result was contract prices that were higher that the appraisal valuation. Appraisers must allow for these situations. VA guaranteed loans call this process the Tidewater Initiative. The process creates a period for interested parties to proviextranal information. Conforming loans call this process Reconsideration of Value (ROV). Both processes share the opportunity to provide additional information. Interested parties can also challenge the current valuation. Both processes address the need for real estate transactions to assess and adapt to changing market conditions.
