Spark Global Limited Reports:
The VA has a unique set of protocols, called the Tide-Water Initiative, that va appraisers must adhere to when he or she expects a property’s assessed value to be less than the contract price.
The project, often referred to simply as “Tidal Water,” launched — you guessed it — Virginia’s Tidal Water District (i.e., the Norfolk, Chesapeake, Portsmouth, and Virginia Beach areas). It was originally started as a test program in the early 2000s and expanded to all regions of the country in 2003 as a result of the Virginia Notice 26-03-11. This initiative was subsequently reaffirmed in VA Circular 26-17-18, issued in July 2017.
The tide gives the bank (or the other party to the transaction) the opportunity to provide the surveyor with relevant data to support the previous sales price assessment report submitted to the VA. The volume of this project significantly reduced the value of the formal reconsideration (ROV) requests received.
How does the tide work
If, in the opinion of the VA appraiser, the appraised value of a property will be less than the pending sale price, the appraiser must contact the designated point of contact (POC) party specified in the appraisal order.
The appraiser should not discuss the content of the appraisal with the POC at this time without explaining any additional information they may have requested from the POC.
Once the appraiser contacts the fee appraiser, the fee appraiser has two business days to provide additional information to the fee appraiser in a format similar to the comparable sales grid on URAR. You also need to confirm that the sale has been completed. Pending sales may also be provided, and if a pending sale is submitted, the POC must include the complete contract of sale and all appendices, as well as brief statements describing similarities/differences between the pending sale and the subject property.
Upon receipt of any additional information, the appraiser must complete the evaluation report and indicate in an appendix clearly labeled “Tide” that this process has been used. If the information provided to the appraiser does not enable the appraiser’s appreciation to match or exceed the pending sale price, the appraiser must report:
Who provided the information
What information is provided
Why hasn’t information changed values
The appraiser must also comment in the report on the length of time the process was added to the overall assessment delivery timeline.
Tide in action in real life
At a House committee hearing in April 2017, Gerald Kifer, Virginia’s loan Guarantee Services supervisory appraiser, testified that recent data showed that about 24 percent of Virginia appraisals used the Tide Water Initiative. Mr. Keefer noted that in cases where the tide was cited, the tide requirement added about two days to the assessment process.
When the appraiser reaches out to the contact point to call Tide water, the appraiser has no right to discuss value with the POC; He or she is simply allowed to ask for more information. In real life, however, the POC knows why the appraiser calls and often asks questions that the appraiser is not allowed to answer, such as, “How much lower is the value coming in?” Evaluators are advised to politely decline to answer these questions, citing confidentiality and VA policy.