What Is Tidewater

[Fargo1]

I have a VA appraisal I did a couple weeks ago. The lender just sent over a new contract with some changes they did to a bathroom. Of course they want the new value to be $5000 more to match the new PA. They made a comment I can invoke "Tidewater" if I need to. What is Tidewater. I've heard the name before but I am not familiar with it.

 

[Mike Kennedy]

"legalized" Coercion

 

[Hondo]

B5: VALUATIONS BELOW THE CONTRACT PRICE (AKA Tidewater)

If you determine that the final value estimate will be less than the contract price, then do the following
BEFORE you complete and send the appraisal report:

• Check the Appraisal Request form (VA Form 26-1805) in block 30 for a Point of Contact (POC). If
none indicated then contact the requestor (at the bottom of the form). Advise that individual ONLY
that you are requesting any additional data that they (or the buyer/seller/agents) can provide, to
ensure that you have considered all pertinent information. You should AVOID any discussion of the
value estimate.

• The POC or requestor will have two workdays to respond.

• Additional information (if any) sent to you should be in a format similar to the comparable sales grid
(i.e. page 2 of the URAR) including verification of the sale. When pending sales contracts are
submitted (especially to support time adjustments) they must be complete with all addendums
attached. A narrative should be included describing the similarities and differences between the
pending sale(s) and the subject property.

• Review and analyze all data submitted, then complete your final report based upon your finding.
If you are able to increase the value estimate to meet or exceed the sale price, then comment to
the extent of this process used and the (extra) time needed.

• If the final value estimate is still less than the contract price even after review of additional
information, then comment on the source of the additional information, what was provided, the
results of your review and analysis, and the (extra) time needed.

 

[Mike Kennedy]

final value estimate will be less than the contract bull$eye price then do the following BEFORE you complete and send the appraisal report:

If you are able to increase the value estimate to meet or exceed the bull$eye price

If the final value estimate is still less than the contract bull$eye even after review

 

[Fargo1]

Thanks guys. I'm not sure how this will play out. What happened is its a new construction model home. Everything was complete. The buyer wanted a shower only instead of a tub/shower. So the contractor pulled the fiberglass tub and put in a fiberglass shower tray. So the house now cost $5000 more than before. Which likely could have been worked into the original appraisal if I had the full PA and addendums when the appraisal was completed. But I just got the addendum today with the extra charges. Over a week after the original appraisal was done, they sent the PA Addendum along with the final inspection request. Now they want more value. Although I don't think I can do it. I don't see how a tile shower with a fiberglass tray has more value than a tile shower with a tub. In fact, I almost wonder if the house would have more value if they had left the tub instead of the shower.

 

[sandpiperapp]

Sounds like a new assignment to me. Was a Notice of Value issued for the first appraisal?

Besides, the house may cost more, but in my market there is not a verifiable difference in value between a standard tub and a standard shower.

Cost does not equal value.

 

[sandpiperapp]

If a Notice of Value was issued prior to the contract addendum, the VA does not REQUIRE you to review changes after the effective date of the report. You can, but it is up to you.
Personally, I do not review any changes or additions to the contract after the effective date of my report.

 

[Fargo1]

I don't think I received a Notice of Value. In fact, I don't know if I've ever received one from anyone.

I was thinking new assignment as well. But I had a similar case a few months ago that I called a new assignment when the PA changed. So the lender cried to VA because I was going to charge more for a new assignment. The VA took the stance that it was the same case number so it can't be a new assignment. Or something along that line. Funny how USPAP doesn't matter when it makes things more difficult for them.

Anyway, after viewing the property and seeing the changes that were made, I determined I can not add value just because their cost changed. As you mentioned cost does not equal value. I have had some communications with the lender and told them the shower does not add any value and I think they understand and the buyer is going to pay the difference. So I think we got it worked out. Thanks for all the help.

 

[Eli]

In every case of tidewater I have witnessed, property inspection takes place before tidewater as well as a majority of the scope of work involved in the valuation process. And, the final steps in the valuation process have not occurred. I see absolutely no credible method of supporting an increase in value opinion based on the information you provided. Please ask them to provide you with information to support an increase based on a recognized technique of appraisal practice.

 

[CindyR]

90% of my tidewaters are invoked prior to the property inspection. just saying some folks do it differently.