Is this the end of the discount broker?

CA,

Don`t think so. Like everything else in business there is always room for a niche.It all depends on the business model, a company sets forth.

In the case of Foxtons, they spent too much money advertising without having enough "manpower" to accommodate the callers who were inquiring about listing their homes. Part of the problem was they were banking on being a Hot IPO down the road,much like ZIPR.  

BTW, Why do so many agents have an aversion to competition?

I agree that discounters will simply adapt and change form. I recently heard about a company that works mostly through the internet (I forgot its name). But Foxtons left our area quite sometime ago.

Oh I am soooo sad  . THi si some of the best news I have had today

Foxtons sent me a GORGEOUS brochure (way out here in eastern Long Island) and I wondered how on earth they could afford such a presentation- evidently, they couldn't.  Interesting thought, Scott- and I agree- what's the aversion? :)  Those mass mailed brochures had to have cost a fortune, but after receiving it, the signs started going up. Oh, and Charles- they sold their offices overseas before coming to the states.

Not the end ... discounters will adapt.  The business model continues to attract agents and clients, so the idea isn't entirely flawed ... it's just that there's a balancing trick to profitability.

I doubt it!  I am seeing the end of huge RE companies who are in the practice of soaking their agents and carrying large overhead.  We are watching the smaller independents pop up and succeed.  It is most definitely interesting times!

Foxtons' overall business model,not it's pricing structure, more likely than not, caused them to go under.


What killed Foxtons had little to do with discount real estate. The Foxton's that failed was not even a discount company. They abandoned the discount model when they started charging three and four percent. Their predecessor YHD was, and even they didn't get it right. Foxtons tried to take a business model that worked in Great Britain-  a model that doesn't embrace the MLS-and make it work in the United States. It just wasn't a fit.

Foxtons then abused the MLS by offering 1% co-op. They took advantage of the market at the expense of the agent community.For an Alternative Business Model to not only survive but thrive in this industry ,one must pay the going coop rate. Those that abuse the MLS by offering less (which they get away with in a hot market) will suffer in a buyers market. They couldn't survive long term based on their practice of spending a huge amount on advertising and abusing the MLS.


Foxtons had hundreds of paid employees and customer service centers; a model that didn't allow them to make adjustments to their overhead in down markets. In addition, they utilized a salary model in an industry that relies on sales people. The fastest way to un-motivate sales people is to give them a salary that doesn't consider actual production. Interestingly Foxtons still had 4400 listings at the time of their demise, so it appears there isn't a shortage of consumers looking for alternatives to higher fees. 
 

The cost of doing business is the cost of doing business.  When the outgo exceeds the income, the upkeep will be your downfall.  Doesn't matter if you are selling pickles or houses. We all have to adjust and change, but if you are already running on a shoestring it really becomes tough when the market changes.

Discount brokerages are a flash in the pan man!  We've all seen it.  They are here today and gone tomorrow.  Their numbers simply don't add up!  The only thing they have going for them is all the buyer leads they get from all their junky, overpriced listings that don't sell all over town.  But who really wants to not be able to tell a seller you'll sell their home and then really sell it?  Who wants to do a sorry job for your seller and then chase buyers all over the country???  Not me!