What happens when an appraisal comes up short of what a home is sold for? If the buyer has a VA loan, here’s what it looks like. 

Let’s say a home is sold for $250,000 to a buyer with VA financing. The mortgage company will send the appointed VA appraiser along with the contract for the property. The appraiser then goes to the property, measures it, looks at its condition, and formulates an opinion on its value. Then, the appraiser will go back and do some research to see what other, similar homes have sold for recently. 

This is why it’s so important for your Realtor to complete a CMA, or comparative market analysis. This will give you a great idea of what the home will appraise for before the appraiser even gets there. Both your Realtor and the appraiser use the same sold database to know what homes in the neighborhood have sold for recently. 

“I’ve had a short appraisal three times in the last 30 days.”

If the appraiser cannot find the value that’s on the contract, he declares Tidewater. This is a VA term that states the appraiser can’t find the value of the home that’s on the contract and gives the mortgage company 48 hours to find additional comparable properties to support the contract value.

Many times, this causes a great big problem. I’ve had this happen three times in the last 30 days, unfortunately. There are a few different ways with which to proceed in this, but it rarely happens. Typically, the seller will have to come down on the sale price to get the appraisal to come in. The VA buyer always has an out too and can cancel the contract if the appraisal comes up short.

If you have any questions for me in the meantime about any and everything VA loans, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.