The two-business-day window that can make a difference in a VA home purchase
One of the biggest misconceptions about VA financing is that a low appraisal automatically puts a home purchase in jeopardy.
It doesn't have to.
The VA has a process called the Tidewater Initiative that gives buyers, lenders, and real estate agents an opportunity to provide additional market evidence before an appraisal is finalized.
For military families buying or selling a home, understanding how this process works—and how quickly everyone needs to respond—can make a meaningful difference in the outcome.
What Is the VA Tidewater Initiative?
The Tidewater Initiative is a procedure used when a VA appraiser believes a property's market value may fall below the agreed-upon purchase price.
Rather than simply completing the appraisal at the lower value, the appraiser alerts the designated point of contact, typically through the lender, that additional market information may be needed.
The parties then have two business days to submit relevant comparable sales and other supporting market data for the appraiser to consider.
This is an important distinction: the appraisal hasn't been finalized yet.
The process creates an opportunity to address a potential valuation problem before it becomes an official appraisal shortfall.
And despite its name, Tidewater isn't limited to the Hampton Roads region of Virginia. The program originated there, but it applies to VA appraisals nationwide.
How Long Does the Tidewater Appraisal Process Take?
The most important deadline is the two-business-day response period.
Here's how the process generally unfolds:
Step 1: The appraiser identifies a potential value shortfall.
During the appraisal process, the appraiser determines that the available market evidence may not support the contract price.
Step 2: Tidewater is initiated.
The appraiser notifies the designated contact that additional sales information can be submitted.
The appraiser does not disclose a proposed appraisal value or negotiate a number.
Step 3: The two-business-day window begins.
The lender, agents, or other designated parties have two business days to provide additional comparable sales and supporting information.
Step 4: The appraiser reviews the evidence.
The appraiser considers the submitted information, determines whether it supports a different valuation, and completes the appraisal.
Step 5: The lender reviews the appraisal and issues the Notice of Value.
The Notice of Value, or NOV, establishes the property's reasonable value for VA loan purposes, along with any applicable conditions.
Does Tidewater Delay Closing?
It can, but not necessarily.
The two-business-day period is an opportunity to submit evidence—not a guarantee that the entire appraisal will be completed within 48 hours.
The time required to finalize the report depends on the appraiser's assignment deadline, the information submitted, and the lender's review process.
VA appraisal completion requirements vary by location and property type. The lender should confirm the applicable deadline when the appraisal is ordered.
For military families working around PCS orders, household goods deliveries, temporary lodging, or the sale of another property, even a few additional days can matter.
That's why I prefer to address potential appraisal concerns before they become last-minute problems.
What Information Can Help During Tidewater?
Not all comparable sales are equally useful.
A property selling for more money doesn't automatically make it a good comparable.
The strongest evidence generally includes recently closed properties with similar characteristics, including:
Location and neighborhood
Square footage and floor plan
Age and condition
Renovations and improvements
Lot size and property features
Sale date and market conditions
The goal isn't to find three expensive houses and argue that the subject property should be worth the same amount.
It's to demonstrate, using relevant market evidence, what buyers have actually been willing to pay for comparable properties.
Sometimes an important comparable sale was overlooked. Sometimes a property has features or improvements that aren't immediately apparent. And sometimes the contract price simply isn't supported by the market.
A good agent needs to recognize the difference.
What Happens If the VA Appraisal Still Comes in Low?
Let's say a buyer agrees to purchase a home for $650,000, but the VA Notice of Value establishes a value of $625,000.
That creates a $25,000 appraisal gap.
The buyer and seller have several potential options.
The seller can reduce the purchase price. This resolves the difference if both parties agree to the lower amount.
The buyer can contribute additional cash. A buyer may choose to cover some or all of the difference, provided the financing and available funds support that decision.
The parties can negotiate a compromise. The seller might reduce the price while the buyer contributes additional funds.
The buyer can request a Reconsideration of Value. If additional evidence supports a higher value, a formal review may be appropriate.
The buyer may be able to terminate under the VA escape clause. The required VA escape clause protects the buyer from being obligated to complete the purchase when the established value is below the contract price, subject to its terms.
The important point is that a low appraisal doesn't automatically dictate one outcome.
It creates a decision that should be evaluated against the buyer's financing, available cash, the property's market value, and the terms of the contract.
Tidewater vs. Reconsideration of Value: What's the Difference?
These two procedures are often confused.
Tidewater happens before the appraisal is finalized.
It gives the parties an opportunity to submit additional market evidence while the appraiser is still determining value.
Reconsideration of Value (ROV) happens after the appraisal and Notice of Value have been issued.
An ROV is a formal request to review the established value based on additional evidence or concerns with the appraisal.
Neither process guarantees a higher valuation.
Both depend on credible market information.
From a transaction-management standpoint, I'd rather have strong comparable sales ready when Tidewater is initiated than wait until a low appraisal has already been issued.
What Sellers Should Know About Accepting a VA Offer
Sellers sometimes assume that VA financing creates more appraisal risk than conventional financing.
That assumption can cause sellers to overlook otherwise well-qualified buyers.
Every financed transaction carries appraisal risk. The important questions are whether the purchase price is supported by the market, whether the buyer is financially qualified, and how the contract addresses potential problems.
When evaluating a VA offer, I look beyond the purchase price.
I want to understand the financing, the lender's experience, the property's likely appraised value, and whether the transaction timeline is realistic.
A higher offer isn't necessarily a stronger offer if the price is difficult to support.
And a VA buyer shouldn't automatically be considered less competitive simply because they're using an earned military benefit.
Why This Matters for Military PCS Moves
Military relocations add another layer of complexity to real estate transactions.
Buyers may be purchasing from another state or overseas. Sellers may already have orders and a required departure date. Families may be coordinating temporary housing, school transitions, and the sale or rental of their existing home.
An appraisal issue that might be a manageable inconvenience in an ordinary transaction can become a much larger logistical problem during a PCS.
My approach is to identify the potential complications early.
That means evaluating comparable sales carefully, understanding the financing, coordinating with the lender, and building a transaction timeline that accounts for more than the ideal closing date.
The goal isn't simply to get a contract accepted.
It's to get the transaction successfully closed without exposing the buyer or seller to unnecessary financial risk.
The Bottom Line
The VA Tidewater process isn't a failed appraisal.
It's an opportunity to present additional market evidence before the appraisal is finalized.
The two-business-day response window is short, which makes preparation and communication especially important.
Whether you're buying with a VA loan or selling to a VA-financed buyer, the quality of the market analysis and the experience of the people managing the transaction can make a difference.
A well-supported purchase price, a realistic timeline, and a clear understanding of your options are more valuable than simply hoping the appraisal comes in at contract price.
Alexis "Lexie" Dindal
REALTOR® | Compass Military Division
Military Relocation, VA Financing & Assumable Mortgage Specialist
Licensed Since 1999 | 300+ Sales | DRE AB066667
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