The VA Tidewater Process: What Happens When the Appraisal Looks Low

What Tidewater is

The Tidewater process is named after the Tidewater area of Virginia, where it started. It is a step in every VA appraisal. If the appraiser sees that the value is likely to come in below the contract price, they must tell the lender's point of contact before finishing the report.

The lender, your agent or the seller's agent then has two business days to send in more information that might support the price. The appraiser must look at it before setting a final value.

Why it matters

A low value can cause real problems. You may have to bring more cash, ask the seller to drop the price, or cancel. Tidewater gives everyone a fair shot at showing the appraiser sales the appraiser may have missed. It is not a guarantee the value will go up, but it often helps when the market is moving fast.

What a good Tidewater response includes

• Recent sales of similar homes, ideally within the last few months
• Homes that are close by, in the same neighborhood or school area
• Similar size, age, lot and condition
• Pending sales that show where the market is heading, clearly labeled as pending
• A short list of upgrades to the home, like a new roof, HVAC or kitchen, with dates and costs
• Notes on why each sale is a good match

A strong package is clear and short. The appraiser has a limited time, so make it easy to read.

What not to send

• Asking prices of homes that have not sold
• Sales far away or from a very different type of home
• Pressure or opinions about the value. The appraiser must stay independent, and pushing them is against the rules.

Step by step: handling a Tidewater notice

1. The appraiser notifies the lender that value may be low and starts the two-business-day clock.
2. The lender tells your agent right away. Ask your lender to make sure this happens.
3. Your agent pulls comparable sales and works with the listing agent, who often knows the home's upgrades.
4. Send the package through the lender's point of contact before the deadline.
5. The appraiser reviews it and either raises the value, keeps it, or explains why the new data does not fit.
6. Get your Notice of Value and decide your next move.

If the value still comes in low

You still have options:

• Renegotiate. Ask the seller to lower the price to the appraised value.
• Split the gap. The seller lowers the price some, and you pay the rest in cash.
• Pay the difference. You can bring cash to cover the gap. Your loan will be based on the lower value.
• Request a reconsideration of value if you find new sales or errors after the report.
• Walk away. The VA escape clause lets you cancel and keep your earnest money.

Tips for buyers

• Pick an agent who has closed VA deals and knows how Tidewater works.
• In a hot market, ask your agent to have a folder of recent sales ready before the appraisal visit.
• Ask the listing agent for a list of upgrades with dates at the time you make your offer.
• Do not panic. A Tidewater notice is a warning, not a final number.

Bottom line

Tidewater is a small window with a big payoff. Two business days goes fast, so make sure your lender and agent know to act right away if they get the call.