What Is Tidewater

[Eli]

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

I really don't see a problem with that scenario, although I assume the number of assignments where MV meets contract price would vary more depending on how much of the scope of work has been completed before the tidewater initiative is invoked. In other words, OMV is not concrete at the time the tidewater initiative is invoked, but it is much more concrete if an interior inspection has been completed as well as the majority of the scope of work involved in the appraisal assignment. The number of cancellations might vary depending what stage of the valuation process the tidewater initiative is invoked. I don't feel as comfortable invoking tidewater before an interior inspection as I do after an interior inspection. In fact I don't think I ever have invoked tidewater before inspection.

Of course tidewater does not apply to refi's. Cindy, I would be interested if you have any personal business reasons you invoke tidewater in the majority of cases before interior inspection.

 

[Fargo1]

When you 'invoke' Tidewater, do you tell the client you are invoking Tidewater or do you just tell them the value is coming up short and let them deal with it from there? How formal of a process is it to invoke Tidewater. I've had appraisals come in under contract value and just sent them off when they were completed. I didn't know I was supposed to go through this whole Tidewater process.

 

[CindyR]

This is the exact e-mail message I send to the POC and it is usually before the property inspection:

"Hi. My guidelines indicate I am to notify you that the comparable sales data does not adequately support the contract price for this property. Please advise if you have additional sales data to support the sale price. "

This is based on the instructions I found when I learned I had to do this and I assure you it was not my normal practice to ask anyone for additional data if I thought I was going to miss the contract bull's eye. My interpretation of the instruction is that I am considering the 'comparable sales data' when I invoke tidewater not that I am considering my adjusted comps on the grid. The tidewater is based on the raw sales data and not my almost finalized appraisal value.

Now I may have an advantage in this regard because our MLS data is apparently much more comprehensive than some other systems. And, in my area almost all sales are in MLS. And, most of our homes are in homogenous subdivisions with lots of similar properties. So when I extract a list of the most recent sales of the most locationally, physically and functionally similar properties it is generally pretty easy to see that the contract price for the subject is outside the range of prices indicated by the comparable sales data.

I like to have the POC tidewater response before the inspection so I can include any comps they provide in my field inspection and have pictures of them if I do include them in the report. Often I will include the agent's comps to show that they support the OMV even if they would not have been my original selections. And I explain why they are less relevant.

Sometimes I find that when I get the comps on the grid and the inspection results in the report that the contract price is just fine and I did not need to upset all those agents with my tidewater request. Oh well. And sometimes I do get all the comps in the report and the data analyzed and then I need to invoke tidewater because the comparable sale data looked fine but in actuality the analysis shows the contract price is not supported by the sales data. It really is much less work to tidewater at the beginning than at the end, IMHO.

 

[Fargo1]

Thanks, the more I read the post here, the more I realize why some of the early post said Tidewater is legal coercion. Its basically a comp check. Someone who wants a value before the appraisal is done.

I'm not sure if its the differences in markets or if you just know your market that much better than I know mine. But I seldom have a solid idea of market value before I do the complete report. I'm always amazed how people can pull comps before they even view the subject. Let alone make a value determination. I'm not saying your doing it wrong. If you know your market you know your market. I'm just never able to do that. Of course I'm always running behind and just trying to finish up that last appraisal before I get out to the next one. Most of the time I've never even looked at the PA when I view a house.

Thanks for all the comments on Tidewater. This is good info for me. I'm sure there are other VA regulations that I am not fully compliant with as well. I can never seem to get a strait answer on anything when I call the either.

 

[Eli]

This is the exact e-mail message I send to the POC and it is usually before the property inspection:

"Hi. My guidelines indicate I am to notify you that the comparable sales data does not adequately support the contract price for this property. Please advise if you have additional sales data to support the sale price. "

This is based on the instructions I found when I learned I had to do this and I assure you it was not my normal practice to ask anyone for additional data if I thought I was going to miss the contract bull's eye. My interpretation of the instruction is that I am considering the 'comparable sales data' when I invoke tidewater not that I am considering my adjusted comps on the grid. The tidewater is based on the raw sales data and not my almost finalized appraisal value.

Now I may have an advantage in this regard because our MLS data is apparently much more comprehensive than some other systems. And, in my area almost all sales are in MLS. And, most of our homes are in homogenous subdivisions with lots of similar properties. So when I extract a list of the most recent sales of the most locationally, physically and functionally similar properties it is generally pretty easy to see that the contract price for the subject is outside the range of prices indicated by the comparable sales data.

I like to have the POC tidewater response before the inspection so I can include any comps they provide in my field inspection and have pictures of them if I do include them in the report. Often I will include the agent's comps to show that they support the OMV even if they would not have been my original selections. And I explain why they are less relevant.

Sometimes I find that when I get the comps on the grid and the inspection results in the report that the contract price is just fine and I did not need to upset all those agents with my tidewater request. Oh well. And sometimes I do get all the comps in the report and the data analyzed and then I need to invoke tidewater because the comparable sale data looked fine but in actuality the analysis shows the contract price is not supported by the sales data. It really is much less work to tidewater at the beginning than at the end, IMHO.

Thanks, but I think you are creating more work since it is more likely you are dealing with tidewater issues on more assignments than less doing it early.

 

[MICHAEL O'BRIEN]

Good morning/afternoon POC,

This is the communication I send out upon invoking Tidewater. I think is covers the process for the POC, and I hope it helps you.

As per the VA 'Tidewater' Initiative (VA letters 26-04-7, 26-03-19), you are hereby notified as the POC, that the appraised value MAY come in lower than the contract price of $000,000. This notification is based on partial completion of the appraisal report, some comparable sale analysis of the available comparables, and/or the field work. As per tidewater, if any parties wish to submit (gridded) comparable sales (which support value) to me for analysis within 48 hours (2 business days), or by Thursday, 12/32, I will review what they have. I have use of the area's New Haven MLS board, and I have also reviewed the town sales data books (if available). All are sources from which I reviewed some initial comparable sales for this appraisal. The report is not yet complete, so a final value has not yet been derived. If you do make contact with any realtor(s) involved, please notify that they cannot call me directly to discuss the value of this property. Thank you

 

[Mike Kennedy]

Good morning/afternoon POC,

This is the communication I send out upon invoking Tidewater. I think is covers the process for the POC, and I hope it helps you.

As per the VA 'Tidewater' Initiative (VA letters 26-04-7, 26-03-19), you are hereby notified as the POC, that the appraised value MAY come in lower than the contract price of $000,000. This notification is based on partial completion of the appraisal report, some comparable sale analysis of the available comparables, and/or the field work. As per tidewater, if any parties wish to submit (gridded) comparable sales (which support value) to me for analysis within 48 hours (2 business days), or by Thursday, 12/32, I will review what they have. I have use of the area's New Haven MLS board, and I have also reviewed the town sales data books (if available). All are sources from which I reviewed some initial comparable sales for this appraisal. The report is not yet complete, so a final value has not yet been derived. If you do make contact with any realtor(s) involved, please notify that they cannot call me directly to discuss the value of this property. Thank you

I believe if you read thru the VA instructions - the Appraiser is NOT to discuss value at all; merely inquire as to the availability of additional market data (closed sales) thru the POC.

2013 thread discussion (don't let the blue link mislead you, TI applies to purchase appraisals)
VA - tidewater for refi
"The appraiser will not be at liberty to discuss the contents of the appraisal with the POC at this point beyond explaining that they are calling for whatever additional information the POC may be able to provide. We expect full cooperation between the fee appraiser and the specified POC or lender.

Circular 26-03-11 December 22, 2003
c. Once the fee appraiser has notified the lender or POC, they will have 2 working
days to provide additional information to the fee appraiser, in a format similar to the
comparable sales grid on the URAR. Verification that the sale actually closed is also
required. If pending sales contracts are submitted to support a time adjustment, they
must be complete with all contract addendums attached. In addition, there should be a brief
narrative attached that describes the similarities/differences between the pending sale and
the subject property.
d. After receipt of any additional information, the appraiser will complete the
appraisal report indicating that this process was utilized. If the information provided to
the appraiser does not result in an increase in value that meets or exceeds the sales price,
the appraiser will report on an addendum the following information: Who provided the
information, what information was provided, and why it did not change the opinion of
value. In either situation, the appraiser will include a comment regarding the amount of
time this process added to the overall appraisal delivery. VA and Lender Staff Appraisal
Reviewers (SARs) will monitor this factor and determine if reasonable timeliness was
adhered to."

IF someone has a more recent directive which countermands the requirement above, please DO post it. Thanks.

 

[TN Pro]

I guess im confused as to how someone gets on the VA panel, does appraisals for a while and hasnt heard of Tidewater. Thats not a slam on you Fargo, if you were not told.

 

[Proactive]

St Paul RLC Appraiser Guide, Page 17, Section 5.3

 

[Mike Kennedy]

St Paul RLC Appraiser Guide, Page 17, Section 5.3

Thanks - SIGNIFICANT CHANGE from the prior edition: - BLATANT Coercion requiring mandatory Collusion

"5.3 Tidewater Initiative
...provide market evidence for the appraiser’s consideration prior to establishing the final URAR value.

The appraiser initiates the procedure by alerting the contact person that the appraised value appears to come in under the sales price.

The appraiser should not discuss the appraisal contents except to explain that the comparable sales located by the appraiser do not adequately support the sales price.

The contact person then has two business days to provide additional sales information in support of the sales price.

All attempts to communicate with the designated Point of Contact must be documented in the appraisal report to show the date of the attempt, the party’s name and phone number, and whether or not additional information was provided."

Such a practice is clearly outlawed by all Federal Laws governing appraisal for good reason -

Veterans and their families deserve better.