The appraisal came back under the contract price. Before you call the other agent, find out what loan the buyer is using.
FHA, VA, and conventional each handle this differently. Different procedure, different timing, different person who can push. Same $8,000 gap, three different plays. If you write VA contracts, learn the VA process first. Most agents have never had it explained to them.
Conventional: one shot at a reconsideration of value
Fannie Mae's Selling Guide, Section B4-1.3-12, requires the lender to have policies and procedures for a borrower-initiated reconsideration of value. An ROV is a formal request for the appraiser to look again.
Three limits worth knowing before you build the request:
Only one borrower-initiated ROV is permitted per appraisal.
The borrower may submit additional data, information, or comparable properties, "not to exceed five," along with the data sources.
The lender has to complete its own appraisal review before it starts the ROV.
And the clock is hard. Fannie is explicit that after a loan has closed, the borrower can no longer submit an ROV request. One shot, five comps, before closing.
FHA: the value lives with the case file, not the lender
This is the one that surprises people. On an FHA loan the appraisal is tied to the FHA case number for that property.
HUD Handbook 4000.1 sets the appraisal validity period at 180 days from the effective date. The same handbook's Second Appraisal provision prohibits the lender from ordering an additional appraisal to achieve an increase in value.
Switching lenders does not reset the number either. In FHA Connection, a Case/Appraisal Transfer can only be processed on a case that has not been endorsed, and only by the current originating lender or its sponsor or agent. That lender also has to answer yes to the question asking whether the property appraisal is being transferred too. So the buyer's ability to move the file sits with the lender they are trying to leave.
FHA does have an ROV. HUD's borrower-initiated process, issued as Mortgagee Letter 2024-07 and now folded into Handbook 4000.1, allows one borrower-initiated ROV per appraisal, with up to five alternative comparable sales, resolved before closing. Same shape as Fannie's.
VA: Tidewater happens before the number is final
VA is the only one of the three where you get a warning.
Under VA Circular 26-17-18, the Tidewater process is initiated when it appears that the appraised value will be lower than the sales price. The appraiser notifies the point of contact named on the appraisal request, and that contact has two working days to provide additional information to the appraiser.
Two working days. That is the whole window, and it opens before the report is issued, not after.
The circular is specific about what can be sent: a comparable sales grid in URAR format, verification that those sales actually closed, and pending sales contracts with all addendums, plus a brief narrative on how each one is similar to or different from the subject.
If you are the listing agent on a VA contract and you get a call asking for comps, that is Tidewater. Do not sit on it.
The VA escape clause your buyer already has
There is a second thing on VA loans that has nothing to do with the appraiser. Federal regulation at 38 CFR 36.4303(k)(4) requires the contract to state that the purchaser "shall not incur any penalty by forfeiture of earnest money or otherwise be obligated to complete the purchase" if the contract price exceeds the reasonable value established by VA.
That protection is built into the loan program. On a conventional deal, whatever room your buyer has comes from the appraisal contingency you wrote, which is a contract question for your agent, not a loan question for me.
What to actually send
Use VA's list as the template no matter which loan it is. Closed sales, verified, in grid form, with a sentence on each explaining the comparison.
One more thing worth knowing. Freddie Mac's Seller/Servicer Guide lists as an unacceptable appraisal practice the "use of comparable property data provided by any interested party to the transaction without verification by a disinterested party." You are an interested party. Anything you send has to be verifiable or the appraiser cannot lean on it. Send the source, not just the address.
What none of these will do
None of it obligates an appraiser to change anything. Every one of these processes is a request to reconsider, not an appeal to a higher number.
So the ending is still the same three doors: renegotiate the price, the buyer brings the difference in cash, or somebody terminates. The procedures only decide who gets a real chance to make the case first, and how long they have.
The first call
Lead with the loan type. "This is a VA contract, Tidewater is open, I need closed comps to the appraiser inside two working days" is a completely different conversation than "the appraisal came in low."
If you have a deal sitting in this spot right now, send me the loan type and the gap and I will tell you which lever you actually have.
Tucker Watson is a mortgage loan officer with CrossCountry Mortgage serving Columbus, Georgia, Phenix City, Alabama, and the surrounding communities. NMLS #2762636. Cover photo by Sienna Watson.
This article is general information, not legal advice or a commitment to lend. Contract questions belong with your broker or attorney.