Understanding the VA Tidewater Process in Home Appraisals
If you’re in the process of securing a VA home loan, you may have heard the term “Tidewater Initiative” or “Tidewater process.” This unique appraisal protocol is designed to provide transparency and fairness in home valuations, benefiting both buyers and sellers.
What is the VA Tidewater Process?
The Tidewater Initiative is a procedure used by VA appraisers when they believe a home’s appraised value may come in lower than the contract price. Instead of issuing a final appraisal report with a potentially lower value, the appraiser initiates the Tidewater process, giving parties involved—typically the lender, real estate agents, and sellers—a chance to provide additional market data or comparable sales (comps) that justify the contract price.
How Does the Tidewater Process Work?
1. Notification – The VA appraiser notifies the lender that the home’s appraised value may fall short of the contract price, invoking the Tidewater process.
2. Data Submission – The lender informs the buyer’s agent and/or seller, allowing them 48 hours to submit additional comps or relevant market data to support the agreed-upon price.
3. Appraiser Review – The appraiser considers the provided information and determines the final value based on the data and their professional assessment.
4. Final Appraisal Report– The appraiser issues a final value, which is then sent to the VA and the lender for review.
What Happens After a Tidewater Appraisal?
If the appraised value is increased to match the contract price, the transaction proceeds smoothly. However, if the final value remains lower than the agreed-upon price, there are still options:
Seller Adjusts the Price** – Many times, the seller agrees to lower the purchase price to align with the VA appraisal, allowing the sale to continue without additional financial burden on the buyer.
Buyer Covers the Difference** – The buyer can choose to pay the difference between the appraised value and the contract price out of pocket (though this is often discouraged in VA loans to avoid unnecessary financial strain).
Renegotiation** – The buyer and seller may renegotiate terms, potentially splitting the difference or adjusting contract contingencies.
Reconsideration of Value (ROV)** – If there is strong evidence that the appraisal should be reconsidered, the lender can submit a request to the VA for an ROV, though this is not guaranteed to result in an adjustment.
Why the Tidewater Process Benefits VA Buyers
The Tidewater process ensures that buyers using VA loans are not overpaying for a home. It provides an opportunity for fair market valuation adjustments before a low appraisal is finalized. Additionally, since VA buyers cannot be required to pay more than the appraised value (unless they choose to), the process protects them from financial strain while keeping sellers engaged in negotiations.
Final Thoughts
If you’re a buyer, seller, or real estate professional involved in a VA loan transaction, understanding the Tidewater process can help you navigate potential appraisal challenges smoothly. In many cases, the final value is adjusted to meet the contract price, or sellers opt to lower the price, allowing VA buyers to secure their dream home without unnecessary complications.
At VAHomeLoans.com, we specialize in guiding veterans and active-duty service members through the home loan process. If you have questions about VA appraisals or need assistance with your home purchase, reach out to our expert team today! https://vahomeloans.com