When you’re a military family in the midst of a Permanent Change of Station (PCS) move, the challenges can feel overwhelming. One common hurdle is dealing with low property appraisals, which can derail your home buying or selling plans. But fear not! There’s a valuable tool at your disposal: the Tidewater Initiative. In this post, we’ll explore what the Tidewater Initiative is, how it works, and how you can leverage it to navigate low appraisals smoothly during your PCS move.

What is the Tidewater Initiative?

The Tidewater Initiative is a procedure established by the Department of Veterans Affairs (VA) to address low property appraisals in VA home loan transactions. Named after the Tidewater area in Virginia where it was first implemented, this initiative allows parties involved in a VA loan transaction to provide additional information and comparable sales data to justify the contract price before the appraisal is finalized.

How the Tidewater Initiative Works

1. Notification of Low Appraisal: If an appraiser determines that the property value may come in lower than the contract price, they initiate the Tidewater procedure. This involves notifying the lender, who then informs the buyer and seller that the appraisal might be lower than expected.

2. Submission of Additional Data: The buyer and seller have 48 hours to submit additional information and comparable sales data to the appraiser. This data can include recent sales of similar properties, unique features of the home, and any other pertinent information that supports the contract price.

3. Appraiser Review: The appraiser reviews the additional data and decides whether to adjust the appraisal value accordingly. If the appraiser finds the new information compelling, they may revise the appraisal to reflect a higher value.

4. Final Appraisal Report: The appraiser submits the final appraisal report to the lender, who then communicates the outcome to the buyer and seller. If the appraisal meets the contract price, the transaction proceeds as planned. If not, the parties must negotiate to address the shortfall.

How Military Families Can Benefit

Navigating a low appraisal can be particularly stressful for military families who are often under tight timelines during PCS moves. Here’s how leveraging the Tidewater Initiative can benefit you:

• Proactive Planning: Knowing that the Tidewater Initiative exists allows you to be proactive. Gather and organize comparable sales data and any relevant property information early in the home buying or selling process. This preparation can save valuable time if the appraiser initiates the Tidewater procedure.

• Collaboration with Your Real Estate Agent: Work closely with a real estate agent experienced in VA loan transactions. They can help you compile the necessary data and ensure it’s submitted promptly and accurately to the appraiser.

• Informed Negotiations: If the appraisal still comes in low despite the Tidewater Initiative, you’ll be in a stronger position to negotiate with the seller. You can use the additional data to argue for a price reduction, seller concessions, or other adjustments to keep the deal on track.

In-a Perfect-World Scenario

Imagine you’re a military family relocating to Southern Maryland. You’ve found the perfect home in a community with excellent schools and amenities, but the initial appraisal falls short by $10,000. By leveraging the Tidewater Initiative, you provide the appraiser with recent sales data from similar homes in the neighborhood, highlighting features like updated kitchens and larger lot sizes. The appraiser reviews the information, agrees, and increases the appraisal value to match the contract price, allowing your purchase to proceed without a hitch.

The Numbers Don’t Lie

• In 2023, VA loans accounted for approximately 11% of total home purchases in the United States. This reflects the continuing importance and utilization of VA loans by veterans and service members as a significant part of the housing market, highlighting the importance of understanding VA-specific procedures like the Tidewater Initiative(Veterans Affairs Benefits)​​ (Veterans United Home Loans)​​ (Veterans Affairs Benefits).

• In 2023, VA loans had an average loan amount of approximately $300,000, reflecting the robust home prices and the purchasing power of veterans and service members. Additionally, the VA loan program continued to have a low foreclosure rate compared to conventional loans, underscoring the stability and reliability of VA-backed mortgages​ (Veterans United Home Loans)​​ (Veterans Affairs Benefits)​.

Share Your Experience

Have you encountered a low appraisal during your PCS move? Share your experiences and tips in the comments below! If you’re preparing for a PCS move and need expert guidance on leveraging the Tidewater Initiative, contact us today. Let’s work together to ensure your transition is as smooth and stress-free as possible.

By understanding and utilizing the Tidewater Initiative, military families can better navigate the challenges of low appraisals during PCS moves. This proactive approach not only helps protect your investment but also provides peace of mind during a time of significant change. So, arm yourself with this knowledge and make your next move with confidence!