Foxtons Shutting Down, The Early Low Commission Brokerage Dies In the Slump
Foxtons was one of the early innovators in the low commission real estate model and focused on the high priced New Jersey bedroom communities. They offered a 2 percent commission to sellers and their agents were on salary, not commission.
The company struggled even in the heart of the boom as other agents did not want to show their homes as being commission based their was very little money for them. Once the market broke, so did Foxtons and now the company is looking at bankruptcy and cutting most of it’s staff.
While it is a shame for the employees that are losing their positions, it also is a testament to the innovative spirit in America. While the real estate sales model is fairly stable, innovators are still able to work and try and build a better mousetrap. Their will be many failures and near misses along the way, but that innate American sense of we can find a better way leads to innovation for the whole industry over time.
So, goodbye Foxtons, but thanks for trying something new and different.
It will lay off 350 of its 380 workers and intends to keep 4,400 listings on the market.
Senior vice president John Blomquist tells The Asbury Park Press the company no longer has the liquidity to operate as a going concern.
Foxtons was founded in 1999 on the principle that consumers shouldn’t pay a 6 percent commission. Agents were paid salaries and customers were charged 2 percent. The company was sold in 2004 and eventually commissions were raised to motivate agents to show Foxtons’ homes. via Newsday.com
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Comment by Staten Island Real Estate broker on 27 September 2007:
So they left 30 employees to handle 4,400 active listings? That’s roughly 146 listings per person. That’s a disaster in a making and a lot of unhappy sellers…
Comment by edk on 28 September 2007:
They had a good marketing plan in the beginng. Rather then slam realtors on billboards,radio and tv they should have pointed out that commission based agents and brokers would work harder and more ethical to make sure the deal would stick and close and were ALWAYS available for clients whithin minutes not days when problems would arise. Ask any Foxtons seller how quick their agents handled customer concerns.
Comment by jkjk on 28 September 2007:
staten island-
those 30 employees range from the legal department, to title, to field services (handling the cars and what not.) not all of them are servicing the remaining listings. i’d guess there are about 10 people working on the current listings, and that’s probably being generous.
Comment by FRANK FIORELLI on 23 December 2008:
Real Estate Agents are a waste.