- MOLIT Korea will start legal process to adopt digital appraisals
- KB Kookmin Bank and Korea Appraisal Associatio starts promotion of blockchain based real estate appraisals
- After a successful pilot run blockchain appraisals will be implenetd in more sectors
On 10th September, the Ministry of Land, Infrastructure and Transport (MOLIT) has announced that they will start preparing a legal basis that will allow issuing of real estate appraisal form over electronic format. With this step, they plan to increase the appraisal industry’s competitiveness. What followed on 16th September 2020 was the announcement from The KB Kookmin Bank of Korea in collaboration with Korea Appraisal Association have started the promotion and adaptation of blockchain technology
The first step in this direction came from the digitization of the appraisal reports of the ban employees. As per the local press of Korea, the bank and the association will work mutually to establish a system that will digitize the business of appraisal activation completely.
Briefs from the Agreements
Through this mutual agreement Bank and the Association plans to stop forgery and denial of the appraisal reports, which is a common occurrence in the country. Digitization will also reduce the paper printing cost and other storage and handling charges that the current company bears. They also plan to increase mortgage loan efficiency by this digitized appraisals.
Head of Korea Appraisal Association, Kim Soon-gu commented on the initiative that this is the first step in expanding the use of digital blockchain-based appraisals. They are also planning to expand the same in public institutions and courts once the pilot run is successful in the banking sector.
What is a blockchain-based appraisal?
Appraisals or real estate appraisals is the process by which a certain value for a property is fixed. This process is required as every property is unique and requires evaluation based on key factors like their conditions and so on. Through blockchain-based appraisals, the report will be directly delivered to the clients. Once the report will be accepted by the clients, the smart contract will become active and the transaction for payment will occur. This also helps in tracking any changes that are being made in the appraisal report which can be made accessible only to certain users that are entitled to it.
When Will It be Implemented?
Currently, Korea is undergoing a revision in its law on appraisal and appraisal agencies. The current Korean Appraisal Board Act does not mention legally that the appraisal system can be digitized over the blockchain. Once the law is revised with the integration of allowance of appraisals to be issued electronically over a digital platform, Bank and Association plan to start their activity. This will start as a pilot run before being implemented on a larger scale.