VA Reconsideration of Value: What Happens When a VA Appraisal Comes in Low?
Updated: Oct 25
The appraisal came back low. Now what? First, a low VA appraisal does not automatically mean the deal is dead.
If there is credible information showing the property may be worth more than the appraised value, VA provides a formal process called a Reconsideration of Value, usually shortened to ROV. And this is another point in the VA appraisal process where who you work with matters. Because my response isn't going to be: “Well, that's what it appraised for.”
We're going to look at the appraisal, look at the market data, talk with the agents, and determine whether we have a legitimate case for reconsideration. An ROV does not guarantee the value will change. But when the evidence supports it, I want to make sure we actually use the process VA gives the Veteran.
First, ROV and Tidewater Are Not the Same Thing
These two terms get mixed together all the time, but they happen at two different points in the appraisal process. Tidewater happens before the appraisal is finalized. If the appraiser believes the available market data may not support the contract price, the Tidewater process gives us an opportunity to provide additional market information before the appraisal is completed.
ROV happens after the appraisal is complete and the Notice of Value has been issued. If the value still comes in below the contract price and there is credible information supporting a different value, the Veteran can request a Reconsideration of Value through the VA process. So with a VA appraisal, we can potentially have two opportunities to address a value concern: Tidewater first. ROV second.
What Do We Actually Do When an Appraisal Comes in Low?
We don't start by arguing with the appraiser. We start by looking at the appraisal. What comparable sales were used? Were there other sales that may better represent the subject property? Were there differences between the subject and the comparable properties that deserve another look? Is there relevant market information that wasn't considered? Did something about the property get reported incorrectly?
That's where I want the Realtors involved. The listing agent often knows that house and that neighborhood extremely well. The buyer's agent may also have valuable information from researching properties while writing the offer. I want that information.
Then we determine whether we have a real case for reconsideration.
“But We Think the House Is Worth More” Isn't Enough
An ROV isn't just asking VA to change the number because everyone wants the transaction to close. We need information that actually supports the request. And this is an area where I don't expect the Realtor or the Veteran to just figure it out on their own.
I have cheat sheets for my Realtor partners that walk through what to look for when identifying comparable sales for a Tidewater response or Reconsideration of Value. Not every nearby sale is a good comparable. I want us looking at things like location, sale date, size, condition, features, and the other differences that could make one property more relevant than another. The goal isn't to send as many comps as possible.
The goal is to identify the strongest, most relevant information and present it in a way that clearly explains why we believe it deserves consideration. I also have guides I can give the Veteran because sometimes the buyer has information that could be helpful too. Maybe there's something important about the property, the transaction, or the surrounding market that isn't obvious from the appraisal itself. Rather than telling you to “send me anything you have,” I can walk you through the types of information that may actually be useful.
You're not expected to know how to build an ROV request. That's my job to help coordinate. I'll tell the agents what we're looking for. I'll help the Veteran understand what information may be relevant. Then we can put together the strongest, most organized request the facts support. Because if we're asking VA to take another look at the value, I don't want to bury the important information in a pile of things that don't actually strengthen our case.
I want to make it easy to see why we're asking for the reconsideration.
This Is Where Your Lender Matters
There are lenders who technically offer VA loans but don't spend much time doing them. And sometimes you don't discover the difference until something goes wrong. A straightforward VA loan can be relatively straightforward for almost anyone.
I care a lot more about what happens when it isn't straightforward. What happens when Tidewater is called? What happens when the appraisal comes in low? Does someone actually review the appraisal? Does someone communicate with the agents? Does someone know what information we need? Does someone know how to help the Veteran submit a well-supported ROV request? Or does the buyer simply hear: “The appraisal came in low. You'll need to figure out the difference.”
That's not how I want to handle it. I don't just tell the Realtor to “send me comps.” I have specific guidance I can give both the agents and the Veteran so everyone knows what we're looking for and how they can help us build the strongest request the facts support. If we have a legitimate argument for a different value, I want to explore it.
That doesn't mean I'm going to promise you I can get an appraisal changed. I can't. It means I'm going to know what options VA gives us and actually use them when they're appropriate.
Who Actually Requests the ROV?
This is an important detail: the ROV is the Veteran borrower's request. Once the appraisal has been submitted and the Notice of Value has been issued, the Veteran can request reconsideration and the request is submitted to VA through the appropriate process. That doesn't mean I hand you a form and tell you good luck.
My role is to help you understand the process, coordinate with the agents, help identify the information that may be useful, and make sure the request is organized and supported before it goes forward.
What Happens After the ROV Is Submitted?
VA reviews the information submitted with the request along with the appraisal and available market data. If VA determines that an increase in value is appropriate, the Notice of Value can be amended. An ROV is a reconsideration, not a guaranteed increase.
Sometimes the original value stands. Sometimes the additional information supports a change. Our job is to put together the strongest legitimate request we can and let the evidence support the argument.
What if the Value Doesn't Change?
We still have options. Depending on the contract and the buyer's situation, those could include renegotiating the purchase price with the seller, the buyer choosing to cover some or all of the difference, or using the protections available under the VA Escape Clause. Which option makes sense depends on the transaction.
That's a conversation we have together.
A Low Appraisal Doesn't Automatically Mean We're Done
The main thing I want Veterans and Realtors to remember is simple: If you hear “the VA appraisal came in low,” don't immediately assume the transaction is over. And don't assume the Veteran has to come up with the entire difference in cash.
Let's look at what actually happened first. Did we go through Tidewater? What information was submitted? Are there additional comparable sales or market data that support a different value? Does an ROV make sense? What does the contract allow? What are the buyer's options if the value ultimately doesn't change? Those are the questions I want to answer before anyone starts panicking or walking away from a house.
Two Opportunities to Advocate for the Veteran
One of the things I appreciate about the VA appraisal process is that there are established mechanisms for addressing value concerns. Tidewater gives us an opportunity before the appraisal is finalized. Reconsideration of Value gives the Veteran another potential opportunity after the appraisal and Notice of Value are complete.
Neither one exists to artificially make a house worth the contract price, and neither one guarantees a higher value. They're there so relevant information can be considered before a Veteran's transaction falls apart over a valuation issue. Knowing those processes exist is good.
Knowing how and when to use them is better. If you're a Veteran buying a home or a Realtor working with a VA buyer and an appraisal issue comes up, call me. We'll look at what we have, figure out what options are actually available, and make a plan from there.
Know Moore. Worry Less. RESOURCES: What Is Tidewater on a VA Appraisal?
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