Question About VA And 'tidewater'

[LeoMN126]

Hello,

Have a couple of questions regarding a VA purchase and appraisal. I am under contract to purchase a townhome in Minnesota - purchase price is $215,000 with a 2% seller concession for closing costs. The appraisal was ordered on 05/21/15 or 05/22/15, and the appraiser went to the property sometime last week (don't know the exact date). Today I received an email from my lender stating they were notified the appraisal was going to come in low, and were reaching out to my realtor to provide comps to support purchase price. They said they had 48 business hours to do so. From my reading I believe this is called the 'Tidewater Initiative?' Anyway, I am sort of in panic mode right now and have been looking over sold properties in my neighborhood.

As I mentioned the property I am looking to buy is a townhouse, and there are something like 250 units in the community. I found an IDENTICAL unit to the one I am trying to purchase - same location (end unit), same floorpan, square footage, upgrades, appliances, etc. - that closed on 05/21/15 for $216,500. This comp is less than a 1/4 mile from the property I am looking to purchase. I guess I am wondering if it is possible the appraiser didn't have this info as it closed so close to when the appraisal was ordered?

Also, I have to admit the house I'm trying to buy is at the high end of what others are selling for, although most of the units for sale are not end units like mine. I've also found identical homes sold for my purchase price within the past year. Can something that sold 10 months ago be used as a comp if it is an IDENTICAL property?

Is it possible for an appraiser to consider a sold property to have been overvalued and not consider it?

Realistically, how often do appraisers amend the value under Tidewater?

Is this Tidewater the same as a 'reconsideration of value' or is that something that occurs after?

I would like to thank you for any responses, and please understand I'm not trying to put down or belittle the appraiser. I'm sure you guys/gals get plenty of flack as it is

 

[Mike Kennedy]

http://appraisersforum.com/forums/pages/search-results/?q=VA tidewater

 

[Mike Garrett RAA]

Good morning Leo,

I am a VA appraiser in Colorado Springs so I can't offer an opinion concerning property values in your area but I can try to answer some of your questions.

Tidewater was designed to offset numerous requests for reconsideration's being sent to the VA regional offices and then referred back to the appraiser. This greatly speeds up the process which is a benefit to the veteran buyer.

It is possible your appraiser might not have had the most current sale IF it hadn't closed prior to his research. Another possibility is that sale was not reported to your local multiple listing system (MLS). In my market nearly all appraisers use MLS sales and would rarely use sales that were not handled by a real estate agent as it is difficult to verify the data. That said, if there is a sale that would support a higher value conclusion the appraiser should consider it.

Please rest assured VA appraisers are very well qualified. I can't speak for everyone but we really do our best to assist our veteran buyers in their purchases; however, it is our duty follow guidelines and the Uniform Standards of Professional Appraisal Practice (USPAP) and sometimes that means the appraised value might be below the contract price.

If you are represented by an agent, he or she should provide the appraiser with closed sales data that might support a higher value conclusion. The appraiser will then analyze that data and decide to either keep the value conclusion the same or change it and report his/her conclusion to the VA.

Thank you for your service and good luck in your purchase.

Best wishes,

Mike Garrett
VA Panel Appraiser for 22 years

 

[CindyR]

[QUOTE="

If you are represented by an agent, he or she should provide the appraiser with closed sales data that might support a higher value conclusion. The appraiser will then analyze that data and decide to either keep the value conclusion the same or change it and report his/her conclusion to the VA."

With all due respect I must point out that my tidewater instructions are different than yours. My tidewater instructions are very clear that I must exercise the TW protocol before I have reached a value conclusion. I must notify the POC if the comparable sales data does not appear to support the contract price. I must request the additional comparable sale data before I have completed the appraisal and determined a value.

Just last week I had a very irate POC, who just happened to be the listing agent (!!!) call and yell at me about "you VA appraisers - what do you think you are doing - you're never going to change your mind no matter what we send you". She wanted to know what value I reached and i said i could not discuss it. She wanted to know what comps I used and i said i could not discuss it. I explained the process and told her I had not reached a value conclusion but wanted to know if she had any comparable sales she would like to provide to be sure I considered all the relevant data before I completed the appraisal.

At that point I did not know the value but I knew the comps were not supporting their desired price range. Your comment about the appraiser can 'keep the value conclusion the same or change it' perpetuates the belief that we have made up our minds and that should not be the case for VA appraisers in this part of the country at least as we should all be working under the same instructions from the Phoenix RLC.

And to the original poster, yes, the ROV process comes later and that starts after we have finalized the appraisal. If we have properly exercised tidewater and considered every possible sale then there should not be a need for a Reconsideration of Value but occasionally that process is implemented too.

 

[Mike Garrett RAA]

I think we both agree just express it differently. I don't know that I need to initiate Tidewater until I have basically completed the appraisal. At that point I give notice and hold off for 48 business hours or until I have received additional data from parties to the transaction.

I don't get irate calls from agents because I politely explain what I need. I also have no problem in telling them what sales I have and have used. This often stops it right there because they won't have anything that would be better.

Something I have found is that many agents don't understand the criteria we are required to use. Current sales not actives, pendings, under contract, etc. Also that we compare apples to apples and oranges to oranges. Lastly, if they do provide some sales data it should be put on a grid and adjusted with normal and customary adjustments. That usually makes them stop and think..."hell, maybe the appraiser is right".

My attitude very well could be attributed to the fact I held a brokers license for more than 40 years and actively managed a real estate company, trained agents, and even owned a master franchise for a 5 state region with ERA Real Estate. I earned the NAR certified broker designation (CRB) as well as the NAR appraisal designation (RAA). I also earned REALTOR® Emeritus status in 2013 so I don't have to pay those nasty dues every year.

I might add the data provided by parties to the transaction rarely supports a higher value conclusion; however, there are a few times there might be a sale I didn't find. The last one I remember was a case where the listing was reported in the wrong MLS area so it didn't show up on my search but the agent knew about it. It did support the contract price and I was able to appraise the property at a higher value.

 

[Proactive]

See below.

 

[Proactive]

As I mentioned the property I am looking to buy is a townhouse, and there are something like 250 units in the community. I found an IDENTICAL unit to the one I am trying to purchase - same location (end unit), same floorpan, square footage, upgrades, appliances, etc. - that closed on 05/21/15 for $216,500. This comp is less than a 1/4 mile from the property I am looking to purchase. I guess I am wondering if it is possible the appraiser didn't have this info as it closed so close to when the appraisal was ordered?
Ask your agent to provide it to the appraiser, then you can be sure it is considered.

Also, I have to admit the house I'm trying to buy is at the high end of what others are selling for, although most of the units for sale are not end units like mine. I've also found identical homes sold for my purchase price within the past year. Can something that sold 10 months ago be used as a comp if it is an IDENTICAL property?
Yes.

Is it possible for an appraiser to consider a sold property to have been overvalued and not consider it?
Very doubtful.

Realistically, how often do appraisers amend the value under Tidewater?
We don't "amend" value under Tidewater, only consider additional data provided.

Is this Tidewater the same as a 'reconsideration of value' or is that something that occurs after?
Not the same (see Mike's detailed response above).

I would like to thank you for any responses, and please understand I'm not trying to put down or belittle the appraiser. I'm sure you guys/gals get plenty of flack as it is
Thank YOU for your service.

 

[LeoMN126]

Thank you for the information. I have communicated with my agent and that comp I spoke of will definitely be submitted. I'm hoping he/she wasn't aware of it when the appraisal was done. As a matter of fact, I don't recall seeing it listed on MLS until just a few days ago. I can't image a sold property is immediately updated in the system, I assume paperwork has to be processed before it is shown as sold?

Thanks again to everybody for your responses, they are MUCH appreciated!