Update 08.14.2018 below:
When you get an email from a lender that says that the VA and the VA appraiser is invoking the “Tidewater” initiative on the home your buyer is buying or on the one that your seller is selling, as a Realtor, you imagine a lot of things.
Some of the first things that you’d probably imagine are that you are a top secret agent that has been shot down behind enemy lines. You were able to make it, unscathed thus far, to a nearby bulkhead. It was at that time you heard plans to scour the beach and jungle for the escapee. It’s time to invoke your Tidewater Training and to bury yourself within the tide with only a Reid to breathe from to avoid enemy capture.
While it has to do with the military – Tidewater is not a life-saving method of training, or is it?
When we have a real estate buyer that is interested in using their VA loan to purchase a home in the Santa Clarita Valley, we are happy to serve their needs – heck, their sacrifice makes it possible for me to be here and do business. Therefore, helping a Veteran buy a home is easy.
Tidewater is the VA code word for giving the lender, the one that is working with the buyer that is purchasing a property using a VA loan, notice of having two days to run comps and get them to the VA appraiser for their review. The comparable (sold) listings that are pulled must be within a 1-mile radius, be apples to apples in comparison and also only be less than 6 months of history.
What typically happens in this case, is the VA appraiser came in lower, with their estimate of value, than the VA buyer offered.
You may be thinking to yourself, “I bet this does not happen that often…” With VA – it happens A LOT. There are a lot of times when the VA Appraiser comes in much lower than offering price or list price. Which is interesting when we have a real estate buyer that can qualify for both VA and FHA lending.
Sometimes, the buyer decides to switch loans because they love the home that the VA appraiser said was not worth the amount they were offering.
Ready to use your VA Loan to buy a home? Let me be your advocate!
At that time, the FHA appraiser brings in the property at the amount offered. The one that VA rejected as far as price.
We have seen this scenario happen to our Buyers that wanted to use VA but also had the ability to write a conventional offer. VA shot down the value and the conventional appraiser supported the offering price.
As a representative of many a Seller in the Santa Clarita Valley and in surrounding communities, we have to keep our sellers up to speed as to what can happen and how the market is currently working.
“Tidewater” is one of those such occurrences. Be Safe…
Update VA loans and lending operation Tidewater
Now that you know what Tidewater is, I’ll give you a run down as to how it applies in the current real estate market in the Santa Clarita Valley Cities being that we are very much in a Sellers Market.
In a sellers housing market, typically rentals are the prime real estate, home sellers have a lot of power when it comes to holding back repairs and credits if asked during the inspection period after the home inspection report has been completed.
In a seller’s housing market we also see that the seller has their choice of offers with various types of financing. Some of the offers are cash, in some cases. The cash offers, while you may think they are the best, are typically looking for a deep discount when they approach the seller’s home for sale.
It has been a rule of thumb that conventional offers, those with in excess of 20% down payment are some of the most secure loans that the seller is able to receive.
VA an FHA loans are typically viewed by home sellers are more risky types of offers. Unfortunately, VA and FHA are very safe and strong. They are completely good loans. They also do a great job at protecting the borrower.
With VA, so hence they have the tidewater initiative, the property also gets a VA case number. If you make an offer at the listing price and if the home seller accepts your offer, then you are golden, to a point. After this, the VA appraiser rolls to the home and does their VA appraisal. If the appraisal comes back less than the amount you have offered because they are unable to prove the property is valued at the amount you did offer, and if the seller rejects it and if you are unable or unwilling to step up to the offering price, the seller is able to cancel. If they cancel, the property obtains a VA case number and will retain that appraisal report for 6 months, 180 days.
That is an extra level of protection and makes Monetary sense for the VA to have as a rule. It’s not that appraisers will be different when appraising real estate, but they are sometimes. In most cases, sellers real estates indicate we are climbing in prices. This being the case, at times the VA appraisers are a bit slower to pick up the slack. And I’m not saying that they should because of that inherit protective nature in their standard.
Since we are on the subject of VA loans
VA – Veterans Administration loans are only able to be obtained on real estate by those who are active service in the Military, Army, Navy, Air-Force, Marines and Coast Guard including all reserves that have had been honorably discharged.
With a Veterans Administration loan, you may want to consider going to a local resource. Someone who is local and is plugged into the local channels. That is a benefit when it comes to VA offers being accepted. As are all types of offers having a benefit if the agent representing the home seller is familiar with a good closing ratio and ethical approach produced by said local VA lender.
VA loans can be big money to a lender. Not that they can charge you, a VA buyer in excess, they cannot. There are strict guidelines given by the VA as to what a VA lender can charge a Veteran buyer. That is another protective benefit of the VA loans. However, the VA is very grateful to the lenders using their VA product and show at no detriment or penalty to the VA home buyer.
Therefore, it’s suggested that you go with whatever lender you want. In some cases, the seller’s will choose a VA offer over another if they know their lender and if that lender has a good reputation.
My suggestion is for you to keep in touch with my team and me so I can best guide you as a Veteran Real Estate home buyer. I was LAPD for a long time and while that does not qualify as a military veteran, it does qualify as a veteran in its own right.
There are other interesting issues that you need to know about making a VA offer. Such as there are particular homes and housing that will not be approved for you to use a VA benefit as in a VA home loan. They have lost or were never certified for a VA loan to be used as a way of financing them.
This is because back in the last crash of the real estate market, we found out that some of the HOA, homeowners associations, because of their becoming insolvent. They lost their reserves due to the lack of payments received due to the high turnover in the way of property owners defaulting on their mortgages. If a person is not going to pay their mortgage, most also let go of the HOA monthly/quarterly payment. That act created issues with the condo, townhome, and some planned urban development – detached condos.
The VA then did not re-approve them when the housing market recovered. Therefore, those complexes are not approved to date. That requires an additional check by me, your VA Realtor. I have my VA lender connection run the actual property number to obtain the VA status, whether it is approved for a VA loan or not.
I then set my VA home buyer’s search in accordance with that standard so they are getting the most accurate real estate listings on SCVnest sent directly to their email address immediately so they see them at the same time I do.
That way, we don’t miss a beat, and if the VA client is ready to buy now, we can go view those listings as soon as they hit the Santa Clarita real estate market for sale.
I also run interference for our VA home buyers with regard to Single Family Residences. Back after the fall of the last real estate cycle, we observed that “condition of the home” affected whether or not the VA appraiser would approve the home to be financed by the Veterans Administration.
In a lot of cases, the distressed real estate inventory was so beaten up, there was no chance the VA would approve some of the homes I showed in the condition they were left in. You may, as a VA buyer, ask why the home seller does not fix the property to it conforms to the VA lending and appraisal standard? That is because they are not willing to inject the money into the property, due to it probably being a loss in its current condition.
Also, the second reason why is that they know that a conventional home buyer or potentially FHA home buyer can have the home appraised and approved for those types of loans, VA is just too strict.
I’m not speaking about entire kitchens being removed, cabinet by cabinet and appliance by appliance, with the copper piping, ripped out of the home. No homes in that condition would have financed with conventional loan or with an FHA loan, no matter the down payment.
I’m speaking about places where the carpet has been cut out with an exposed concrete slab. A hole or holes in the drywall, not from nails but fists or impact devices. Items like that sometimes prohibit the VA lender’s appraiser from approving the home, unless those items are repaired and made right.
Are you ready to use your VA Loan Benefit – or use it again?
There is so much to know about VA loans and lending. We sit down with each of our VA clients and speak about the housing market, answering the hard questions.
Should I buy a home now? What will have better re-sale a two bedroom home or a three or more bedroom home? Is your VA lender attempting to charge you too much or are they able to? What questions should you be asking a VA lender to ensure they are the right fit for you? Are schools important for resale even if I don’t have kids? What are the best ways to buy real estate at a discount? and more.
I will say to you that I’ll be here when you are ready to move forward with a VA home buyer real estate crash course or briefing. I cover the market and introduce you to the listings that are for sale in the Santa Clarita Valley and Elsewhere in the Los Angeles proximate cities and communities.
We well, reach out to me when you are ready and I’ll take great care of you my VA brothers and sisters. As an aside, if you already own a home and want to refinance with a VA loan to take money out, be careful. There is a lot of commercials that are all about borrowing on your home to 100% of your home’s equity. This is another benefit of the VA loan and is not available with other financing types. The question is if you should. The commercials make it look like your right to pull every last cent of your equity and blow it on what you want. Because it’s your right.
Talk to me before you do such a thing and I’ll be here to help guide you. I’m Connor MacIvor.
During my time with the LAPD, I had the pleasure to work with, be trained by and to train many military veterans. I have also had the pleasure to help my VA friends and those whom I just met buy real estate using a Veterans Administration home loan. I have also run interference for my clients who got swept up by those clever TV ads that are lending money on a veterans home equity.
Be sure you have expert guidance before refinancing your home and taking out money to pay bills, etc. While those are “real and actual” programs for the military veteran, they can cause you more harm than good. All you have to do to find out more is to reach out to me directly, Connor MacIvor, and I will give you the lay of the land and ensure that you are not going to be causing yourself to be stuck in a Foxhole with the enemy closing in on you and yours.
I will be here to help you with your VA home loan real estate needs. I will help you with the lending end and the real estate end. I’m not a lender, but I cover my clients well when it comes to finding the best real estate lenders that handle VA loans. I want any VA lender to treat my veterans like family – family they like and not like a number to quickly close the deal and get paid.
That is not how I operate my real estate business and I mandate any lender working with my Veteran clients not operate in that manner either.