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Tidewater Initiative – Use Caution

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Real Estate Agent with RE/MAX Properties, Inc., ABR, GRI, SRES

In the situation a VA appraiser thinks the appraised value of a property may come in below the contracted sales price, the lender is notified by a designated point of contact.  The lender than notifies the buyer's agent that he/she has two business days to provide recent sold comparables to justify the sales price. 

The Tidewater Initiative allows any interested party in a real estate transaction to provide sold comparables (via a point of contact) to the appraiser.  Therefore, the listing agent or anyone else involved may provide market information for sold comps as well.  The VA appraiser does not complete the appraisal until the additional information is received.

The initiative was implemented to reduce the number of appeals to re-evaluate property values assigned by VA appraisers.

As a buyer's agent, why would I go out of my way to find sold comps to support a sales price that the appraiser thinks is too high for the property? 

Isn't the goal of the buyer's agent to seek the lowest price possible for the buyer?  If the appraisal comes in lower than the agreed upon sales price, the buyer is not going to have any interest in paying more for the home than it is worth in this market. 

Conversely, the buyer may want the home badly and request the agent provide the information in order to make the deal work.  Buyer's agents need find out how their buyers want to proceed and not make any assumptions. 

I'm not sure if the buyer's lender passes the information received to anyone other than the buyer's agent.  I don't think lender would since they are also working for the buyer.  If that is the case, should the buyer's agent disclose the information to the listing agent in order to give the agent the opportunity to provide sold comps on behalf of the seller? 

I can see how this type of situation can become very complicated!  As a buyer, I would want to get the lowest price possible for the home.  As a buyer's agent, I would use caution and remember who I am working for because I wouldn't want to violate my brokerage duties to the buyer.



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Kathy Torline
ERA Herman Group Real Estate - Colorado Springs, CO
Colorado Springs Real Estate Blog 719-287-1049

Very informative about the Tidewater Initiative.  Thanks for sharing.  And yes, I think it is important to remember who you are working for.

Aug 15, 2009 12:29 AM
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

This is GREAT information.

As to why a buyer's agent would want to help justify a too-high sale price:

Appraisal is subjective -- not all appraisers are of like mind, nor know all the nooks and crannies in a market area -- especially as well as an area broker would.

Aug 24, 2009 01:39 AM
Patricia Beck
RE/MAX Properties, Inc., ABR, GRI, SRES - Colorado Springs, CO
Colorado Springs Realty

Thanks Kathy!

Aug 24, 2009 03:44 AM
Patricia Beck
RE/MAX Properties, Inc., ABR, GRI, SRES - Colorado Springs, CO
Colorado Springs Realty

Candice- You are right and we are seeing this more and more with the new changes

Aug 24, 2009 03:45 AM
Anonymous
appraiser

"not all appraisers are of like mind," 

do you mean have a vested interest in making the deal work?

"nor know all the nooks and crannies in a market area"

do you mean using a sale regardless if its a comp to make the deal work so the buyer over pays?

 

THANK GOD THESE DAYS ARE DONE. ON TO REAL VALUES.

Thank you for your post Patricia. It's refreshing to see an agent who's not out just to line their pockets. May prospective clients see this post and may you have many fruitful years ahead because of your integrity.

Aug 31, 2009 04:34 PM
#5
Anonymous
Bj

As a buyers agent you ARE trying to get the best price possible for the buyer.  On the other hand you DO NOT want the buyer to find they no longer have a deal if they want the property.  Have you seen this happen? I have.  What if there are more motivations other than just price for a particular property?

Let say you have a buyer in a certain select area, The buyer has certain transportation needs, or wants a particular school, or the house is next door to Grandma, (or any of a number of reasons, that may influence that particular buyer.)  The Buyer may want you to help them support the contract price!  (What if they lose the property THEY WANTED on financing because of the appraisal....and appraiser missed some information you COULD have provided.)

    I think the key is the word "INFORMED"  buyer; YOU can NOT make this decision for the buyer.  Some buyers want you to fight for the contract price....others breathe a sigh of relief.  It is the buyer's choice NOT the agents.  Inform your buyer so they can decide.

   Contract price higher than the appraisal may break some deals... But some buyers may still want the property.  Inform your buyer.   Look and see if the appraiser is correct, or is there supporting information, or something the appraiser did not know, or did not find?  Inform your buyer, then let your buyer decide what works for their situation.   Then you know how to help your buyer.

 

Jun 01, 2010 04:12 AM
#6
Anonymous
Susan Melton

I have a VA buyer that offered full price for a 2 year old home in a new community that was shut down for a year.  There are no comps since there hasn't been a closing for a year.  It is a great deal and they really want the home.  If they would build this same house it would cost them $30,000 more for all the options.  I hope that we can get this closed without a problem.  Thanks for sharing the Tidewater Inititive.

Jul 11, 2010 10:21 AM
#7
Lorraine Santirosa
HomeSmart Realty West - San Diego, CA
#1 San Diego Military Relocation Expert!

Thanks for the post. It's still relevant today as we see more VA purchases in the San Diego area.

Dec 28, 2011 05:54 AM
Dylan Taft
Dylan Taft Broker/Owner Taft Street Realty, Inc. - Woodstock, NY
Ulster County Area Consultant

what about if a seller concession is involved?

Jun 12, 2012 01:15 AM
Patricia Beck
RE/MAX Properties, Inc., ABR, GRI, SRES - Colorado Springs, CO
Colorado Springs Realty

Good question Dylan, I think as long as seller concessions are within acceptable limits, it would not influence the appraisal...what has your experience been?

Jun 19, 2012 02:43 AM
Maree Merriam
Bloomington, MN

Going through a Tidewater right now.  No one I've talked to, including three LO's and multiple Realtors, knows what I'm talking about, except the LO in another state, who does VA loans exclusively.  No fun getting up to speed on something when you're under the pressure of providing supportive comps within the required two days.

Dec 04, 2013 02:41 AM
Patricia Beck
RE/MAX Properties, Inc., ABR, GRI, SRES - Colorado Springs, CO
Colorado Springs Realty

Hi Maree, what a pain.  I hope everything works out.  Finding comps in this market can be tough!!

 

Dec 06, 2013 11:49 PM
Anonymous
Keelan McCamey

I just rec'd one of these and the appraiser sent me an email stating I have two business days to provide supporting comps. I'm the listing agent.

In our market in Denver, since we're getting multiple offers it's best to ask buyers to commit to bringing cash over appraisal since the Federal Government doesn't know what they're doing...this is another example! In a fast rising market, appraisers should be putting more emphasis on actives and under contracts...the VA doesn't work this way.

I'm a veteran and this is not an honest approach. Buyers and sellers should be setting the market...this is why we prep our sellers to ask for a certain $ amount of cash above appraisal...you never know what you're going to get.

Keelan McCamey, Listing Agent
Denver Metro
303-709-8778

Apr 29, 2016 09:22 AM
#13
Ron Bork

In my option, the whole idea that a single dollar value can be applied to any property is absurd.  Aprraisal should provide a range of value rather than a specific 'to the dollar' value.  Easily comped homes can be provided a tight range, while more unusual properties would have a wider range.  Lenders should be able to finance based on the top of the range if they choose to.  Consider that 3 credit scores are pulled yet the opinion of one professional that a home is work X rather than X +/- ... does this make sense to anyone?

Jan 14, 2017 10:00 AM
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

Oh WOW, this is an old post!
To respond to 'Appraiser' . . .

"not all appraisers are of like mind,"
do you mean have a vested interest in making the deal work?

NO . . . it means appraisers in different areas view value differently than others depending on the area and amenities.

"nor know all the nooks and crannies in a market area"
do you mean using a sale regardless if its a comp to make the deal work so the buyer over pays?

NO . . . I'm not sure where that even came from. It means there are intangible amenities in a market area, like views, access to recreation areas for example . . .

Jan 14, 2017 10:00 AM
Ron Bork

it was.  But I was doing a search for the term, saw this thread and liked what you had to say.  

Jan 14, 2017 10:02 AM
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