InMotion Software, a specialized digital research, design, and development agency, has officially launched Sluice, a workflow management platform that leverages blockchain technology to bring greater transparency and security to the residential appraisal industry.
Sluice's distributed ledger database allows multiple users to work on the same valuation orders, while storing a comprehensive history of changes made during the appraisal timeline. The problem that InMotion was trying to solve was the difficulty in what Chief Technology Officer and Cofounder Brian Howard calls “the last mile of data collection”—the ability to send people out into the field with potentially unreliable internet connections, in order to collect the data and maintain a full custody of the changes that are occurring in that data. Blockchain seemed a natural solution to the problem.
Building the platform, however, was no easy feat.
“I have a long-storied career, and this distributed database thing is probably the most challenging thing I've ever worked on,” said Howard, who designed and built the system at InMotion. “It's one of those things that getting a prototype and proof of concept up and running is pretty simple and straightforward, but there's a difference between a prototype and something that you can actually put in production with real data.”
Blockchain is usually coupled with cryptocurrencies, but blockchain technology itself has potential for any number of industries. There are three basic components of blockchain technology: the distributed nature of it; a recorded history of changes in a ledger; and a proof of work. The core of the Sluice platform incorporates two of these components, which are the ledger and its distributed nature.
Driving all of this, Howard said, was the desire to collect data offline, sync data across multiple devices, and maintain the chain of custody. Having the ability to track who's collecting the data and where they are gives InMotion “a very high level of confidence that the data actually came from our app and not someone else trying to spoof, or pretend to be our app. That allows us to maintain that chain of custody. As the data is collected, we know where it came from, and we can we can ensure that the data wasn't tampered with,” Howard said.
“A good analogy for this would be geological sediments. You think about a mountain where each layer of sediments is built on top of each other, and that layered history is recorded forever. You can look back through that history to determine how you got to present day. We can find gems and fossils if we go back and study the past,” Howard said. “That allows us to do some meta analytics; we can not just look at the end results, but also go back and replay the process of how the data is collected, and look for insights in there as well.”
By automatically merging property data into appraisal reports as the data is being collected in the field, Sluice enhances the speed and efficiency of fulfilling orders in a mobile environment. Sluice also integrates with any appraisal management system, enabling appraisal and appraisal management companies (AMCs) to perform and manage real estate valuation assignments in real-time, without the need to switch to a new platform. Sluice is designed to work just as well offline should an assignment take an appraiser off the grid by uploading data to the appraiser's server once the data connection is restored. Sluice is supporting several national AMCs that are using it to administer their order workflow, enabling their users to accept, manage and submit all the data they collect during the course of any assignment.
Blockchain has the potential to transform the buying and selling of property in a number of ways. SpringLabs is probably the most well-known enterprise, working to use blockchain to improve the security and efficiency of credit reporting. The chain of title process, however, is probably the lowest-hanging fruit, and Altisource released a white paper earlier this year about blockchain in the title and settlement industry. There has been a lot of discussion around blockchain’s positive effect on the mortgage industry through improved security and data protection, reduced costs per transaction, and even eliminating need for some extensive compliance departments. While there’s also a concern about the elimination of third-party intermediaries such as bankers, brokers, and title agents, the report concludes that third-parties will still need to research transactions, and determine each transaction’s applicability to a property and create Smart Contracts that fully contemplate all the moving pieces in a real estate settlement.
In the end, that’s all beside the point at this stage.
“Most of the innovation revolves around automating archaic systems rather than promoting truly revolutionary thinking. For example, eClosing technology has been around for more than a decade and we do see pockets of utilization, but it still isn’t commonly adopted in the marketplace,” the report reads. “For blockchain to really disrupt the title search and insurance process, we need a comprehensive system that will post these lien and judgment transactions to the blockchain, associate those transactions with a specific property and allow a search to be performed using a property identifier which will show all transactions in the blockchain associated with that property.”
Howard acknowledges that we are only at the forefront of blockchain technology. Any current advances are very isolated in nature and going forward will require a lot of coordination across the industry.
“What you see the first time around are solutions like ours, designed around a specific problem in very sort of narrow way. And maybe over time that will sort of evolve into something a little bit more industry-wide,” he said.