The Tokenization of Appraisals

I was in college when the “World Wide Web” hit. For you young folks, that’s how we referred to the Internet at first. That’s why you’ll see old websites start with www.something.com. I went to a small rural college, so we actually had to telnet to the University of Kentucky to access the Internet backbone at the time. At home, it was dial-up. That was about 1995 and the Internet was text only. Just imagine no pictures! I got email (PINE, ELM for you older folks), started designing web pages, and could call myself an “early adopter”.

For the following 20 years, I was very much at the forefront of new tech. However, as I’ve gotten older, I’m no longer an ‘early adopter’. I just don’t have time to do the research and deal with the problems that new tech brings. If you don’t understand, one day you will.

So I admit, I was late to the crypto game. I understood the principle, but just didn’t get around to learning about it. But over the last few years, I’ve definitely begun investing in crypto and learning about the blockchain. I have to say “I’m a fan”. So, how is this going to affect my appraisal business?

For me, the decentralized information is the biggest deal of big deals. No one can pull an “Italian Job” on the blockchain, because it is a decentralized ledger of all transactions distributed around the world. The very design of a decentralized platform is that a single bank branch’ cannot be hacked because all the other pieces would immediately recognize the error. The techs call it ‘immutability’. Once data hits the blockchain, it is considered unchangeable. The movie writers are no doubt figuring out the plots to action movies now to ‘hack’ the blockchain!

I also think the fact that no world government can control the blockchain is an important feature. If real estate transactions become part of the blockchain, then imagine a multi-national real estate deal being able to close smoothly without one of the country’s governments getting involved and possibly holding up the transaction.

I predict appraisals will eventually become part of the real estate transaction on the blockchain. In addition, I predict it will fundamentally change appraisals. For example, if I’m an appraiser working on an office building, I could see all the transactions, appraisals, and financials of that building on the blockchain. Now, we have to get all that information manually. Yes, we still have to get emails with attachments… But what if we could see prior appraisals, inspections and audits of a property; a complete history, that would be so much more information to assist in our analysis. Consider, I’m only talking about real estate. I imagine appraisals for personal property, like art, cars, will be in the same category. …Like a Carfax for an artpiece.

In the future, I also predict that I’ll be ‘attesting’ to the quality and legitimacy of an appraisal on the blockchain. Then, my attestation will become part of the record, lending to its credibility.

Hopefully, the days of emailing PDFs of appraisals are not long for this world. I hope to be part of the blockchain in the not-too-distant future.