VA Appraisal 60k below offer price

[Mrsmasha]

I'm posting here with the hopes of learning more about the VA appraisal process and if there is any recourse for an extremely low VA appraisal.
I'm a buyer who has just received an appraisal that is 60k below the offer price. The house is 15 years old and in great condition, quite large (4 beds 3 baths), and in a very high cost of living area. There were no minimum property requirement issues.

Tidewater was initiated, but I fear that my agent and lender were not knowledgable about the process and didn't do an amazing job handling the response. After looking at the appraisal report it seems that the appraiser marked the market as "stable" which seems outrageous (I live in MA, homes are going for 100+ over asking). In addition the comps that he used were over 9 months old and very low, which is strange since there are at least 1-2 comps that support the price and are closer in location and sold in the past month, but for some reason these were not used.

My lender is telling me that there's essentially nothing we can do now, and I'll have to make up the difference in cash to make the deal go through.

 

[Hondo]

I'm posting here with the hopes of learning more about the VA appraisal process and if there is any recourse for an extremely low VA appraisal.
I'm a buyer who has just received an appraisal that is 60k below the offer price. The house is 15 years old and in great condition, quite large (4 beds 3 baths), and in a very high cost of living area. There were no minimum property requirement issues.

Tidewater was initiated, but I fear that my agent and lender were not knowledgable about the process and didn't do an amazing job handling the response. After looking at the appraisal report it seems that the appraiser marked the market as "stable" which seems outrageous (I live in MA, homes are going for 100+ over asking). In addition the comps that he used were over 9 months old and very low, which is strange since there are at least 1-2 comps that support the price and are closer in location and sold in the past month, but for some reason these were not used.

My lender is telling me that there's essentially nothing we can do now, and I'll have to make up the difference in cash to make the deal go through.

My lender is telling me that there's essentially nothing we can do now, and I'll have to make up the difference in cash to make the deal go through. Not Correct.

Have your agent select 3 or 4 good recent comps, similar to the house you are buying and request the Lender appeal to the RLC for a reconsideration of value (ROV). Also ask the agent to do a market analysis for the 1- 3 month period vs the 8 -12 month period. The RLC will make the determination on the reasonable value.

Cleveland RLC handles Massachusetts contact them if the Lender does not follow through.

Cleveland Regional Loan Center
U.S. Department of Veterans Affairs
1240 East Ninth St.
Cleveland, OH 44199

Hours of Operation: Open to the public 8 a.m.–4:30 p.m. Eastern Standard Time
Phone: 1-800-729-5772

 

[Mrsmasha]

My lender is telling me that there's essentially nothing we can do now, and I'll have to make up the difference in cash to make the deal go through. Not Correct.

Have your agent select 3 or 4 good recent comps, similar to the house you are buying and request the Lender appeal to the RLC for a reconsideration of value (ROV). Also ask the agent to do a market analysis for the 1- 3 month period vs the 8 -12 month period. The RLC will make the determination on the reasonable value.

Cleveland RLC handles Massachusetts contact them if the Lender does not follow through.

Cleveland Regional Loan Center
U.S. Department of Veterans Affairs
1240 East Ninth St.
Cleveland, OH 44199

Hours of Operation: Open to the public 8 a.m.–4:30 p.m. Eastern Standard Time
Phone: 1-800-729-5772

Thank you, this is very helpful, i'm going to ask my agent and lender to do exactly this.

 

[Zoe]

Thank you, this is very helpful, i'm going to ask my agent and lender to do exactly this.

Real property values are very local, so I could ask a few questions to help me understand. Are all the comparables located in your subdivision? I am just curious because it helps even try to give any opinion.

 

[Proactive]

BuddyKat has provided excellent advice, which is exactly how it is done for a VA ROV. Follow through and don't give up.

Most importantly, thank you for your service!

Good luck!

 

[Zoe]

Thank you, this is very helpful, i'm going to ask my agent and lender to do exactly this.

If tidewater was issued, they probably already did that. If they didn't then they should have. You can read in the report the results of the tidewater process. I don't know where it will be in the appraisal report. You can find it if you have a copy of appraisal report.

 

[Mrsmasha]

Real property values are very local, so I could ask a few questions to help me understand. Are all the comparables located in your subdivision? I am just curious because it helps even try to give any opinion.

It's a somewhat rural/spread out area, so unfortunately not a lot of comps that are in the immediate neighborhood.

The appraiser used 3 comps, the most recent from February, the other two from September. Two of them were 1 mile away, one was 2.5 miles away.
The comps that were sent during Tidewater were all from the last 1-3 months, and were 5 miles, 4 miles, and 1 mile. I'm a bit baffled why he didn't include the one that was 1 mile away as it seems similar (at least to me), and definitely supported the price.

 

[Zoe]

It's a somewhat rural/spread out area, so unfortunately not a lot of comps that are in the immediate neighborhood.

The appraiser used 3 comps, the most recent from February, the other two from September. Two of them were 1 mile away, one was 2.5 miles away.
The comps that were sent during Tidewater were all from the last 1-3 months, and were 5 miles, 4 miles, and 1 mile. I'm a bit baffled why he didn't include the one that was 1 mile away as it seems similar (at least to me), and definitely supported the price.

Okay. That is a good comp to use as ROV like others suggested. Lender will have to request ROV. I don't know if that comp will get you there on price because I am not familiar with your area.

 

[Mrsmasha]

BuddyKat has provided excellent advice, which is exactly how it is done for a VA ROV. Follow through and don't give up.

Most importantly, thank you for your service!

Good luck!

Thank you!

Okay. That is a good comp to use as ROV like others suggested. Lender will have to request ROV. I don't know if that comp will get you there on price because I am not familiar with your area.

Thanks! We're going to ask them to use this comp and perhaps reconsider the 2% market adjustment from last September.

 

[Zoe]

Thank you!

Thanks! We're going to ask them to use this comp and perhaps reconsider the 2% market adjustment from last September.

2% market adjustment may or may not be true. Rural is very hard to calculate market condition adjustments and the 2% may include properties that are not even comparable to the house you are buying.