by G. Sax, Head of Communications, RESO
This week’s interview is with Kathleen Lappe, CEO at DirectOffer. We talked about building a business meant to cross borders, the misunderstood world of real estate auctions and what goes into a work ethic. Enjoy!
Q1: During a recent RESO Three Questions with Joe Schneider of Modern.tech, DirectOffer was called out for being on top of doing international real estate business, and you have been on a panel at a RESO conference about the importance of building international real estate standards.
Can you briefly explain your position on the matter and what DirectOffer is doing in the global marketplace?
Kathleen: The world is 100% global. We want to do business wherever we can, and that includes marketplaces outside of the U.S. The more we can standardize data, the easier it is to do business without borders.
And while doing that, you have to look at every country as its own ecosystem. We cannot force our U.S. way of conducting real estate transactions upon them. We have to approach their existing standards with respect and on a case-by-case basis with each country, bringing our expertise to the table for a mutually beneficial outcome.
At DirectOffer, we have worked hard to understand cultural differences. We don’t go in with a “my way” approach when looking to bridge gaps between the countries we work with.
We have learned to specialize in 107 dialects, and we own several AI patents to help us do our business, because AI is not going away. If you have a company and are building great tech, put a patent on it to prevent infringement on your business and ultimately the success of your clients.
The most important aspect of international real estate is understanding compliance and regulations. In other parts of the world, there is not an established MLS system, but there are established associations and business practices. There are rules in place, and you have to know them.
You also have to be willing to get rid of some preconceived notions. For instance, “auction” is not a dirty word! It’s something that they regularly do and not just as a foreclosure. In the European Union, for example, real estate sales are done by private treaty or auction. Our sister company does a lot with auctions.
Q2: I’m glad you brought up auctions. You have a history in working with homes purchased at auction, which is not something that the average MLS or association talks much about. Is that a niche business or are there opportunities in that space for organized real estate?
Kathleen: There is definitely opportunity in that space, but it’s how you approach it. When you sell in the auction method, you have to have additional state licenses per state. If you don’t have that, you jeopardize your brokerage license.
Brokerages do get fined. In Kentucky, for example, you have to have a real estate license to sell, and you have to have an auctioneer’s license to sell in that manner.
A tech company would have to understand licensing laws and insurance to cover it. It’s not a traditional listing and should not be approached as such. It doesn’t work that way. It is a completely different way of selling. I consult on this all the time and work closely with auctioneers.
But if you do your research, it can be lucrative. Many big brokerages that you know have auctioneers – virtually all of the big brands have them.
We operate our auction business in 34 different global territories, accounting for 3.5 billion dollars since 2015. And like I said before, auctions are not just foreclosures. They include farms, homes, commercial properties and land.
Q3: I have met many passionate real estate entrepreneurs in a sales-oriented industry over the last 20 years, but you are among the top tier of people who are always ready and willing to sell the sizzle of your company. Where does that passion and tenacity come from?
Kathleen (Takes the deepest, reflective breath ever heard during a Three Questions interview): I grew up in this industry. I’ve never been an agent, but my parents always put me in charge of tech and marketing.
My mother raised me while living paycheck to paycheck to put food on the table, and I inherited that work ethic. If she didn’t sell a house, it was tough, let me tell you. As was the market. Interest rates were at 17 or 18 percent back then.
When I first built DirectOffer, and then when I started to evolve it after seeing a need for young adults to buy online, I went at it with the same drive as my mother.
I was also motivated by my adult daughter when she was searching for a home. She is neurodivergent and has autism, and she became frustrated right away with the very first step in the modern way of finding a home – searching online.
By watching and learning from her experience, I felt that I was in a position through my own life experience and education to build tech for people with different situations and challenges, whether that be neurodiversity, language limitations, not being able to hear and not being able to see.
I felt a need to level the playing field, because everyone deserves a home. By starting people down that homeowner journey – with Fair Housing as a backdrop, with the American Disabilities Act in mind, with Braille as an option – everyone has a chance.
You can’t just serve up one thing and expect success for very long. For instance, we did more for interactive virtual tours at a fraction of the cost, giving MLSs an actual return on investment that increased member retention and growth, which is good for us, because it increases orders!
RESO: You’re selling the sizzle again.
Kathleen: Sorry. I can’t help it. Everyone should love what they do, and I certainly do.
Three Questions is an interview series that features real estate industry professionals, their businesses and how they interact with real estate standards, sometimes in a fun way.
