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  • Writer's pictureJesse Ledbetter

Appraisers, "Tidewater" every sale.

The Veteran's Administration has a policy named the Tidewater Process designed to ensure that the appraiser has evaluated all relevant sales. During my training, I found this process to be a great tool. It sadly rarely provided data that would change the market value of the home (horror stories below), but it did bolster reports that I was working on. There are lessons that we can learn from and implement in our non-VA work that will strengthen our reports and save on reconsideration of value requests.

The Tidewater Process essentially goes like this:

  1. During the appraisal process, the appraiser suspects that the market value will be below the contract price.

  2. The appraiser reaches out to the client to initiate Tidewater.

  3. The client reaches out to one or both agents to provide a total of the three best closed sales that they believe support the contract.

  4. The appraiser must consider and comment on these sales.

In my time working on VA reports, a few of these ended up in new support. The worst-case was the instance where the selling agent provided five sales ranging from $100-400k whose median price was the list price... that's not how any of this works.

To the savvy appraiser, you may be concerned about a USPAP violation, and you would be right. If the appraiser were to disclose any opinion/conclusion developed during the report with a non-client, this would be a violation of confidentiality. However, there is a way to take the principles of this method AND stay USPAP compliant.

On every assignment that I have, I email the agent to schedule the inspection and ask for any updates/upgrades to the home. I also add a single sentence, "Additionally any details that you can provide concerning the number of showings/offers/CMA provided to the seller may also be helpful." At this point in the process, I haven't begun my analysis, I am still firmly in the data gathering phase, so I can't even appear to be disclosing an opinion as I have none. The listing and buyer's agents are a source of information, so why not use them?

If the property's market value is as much or more than the contract, then there are no issues. However, if my analysis begins to question the contract price, I have the best properties for consideration available to me, to comment on why they were or were not included in the report. I'm not perfect, and may have missed the perfect comparable OR I save time on a reconsideration of value request by summarizing the best information available to me.

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