I have to admit I kind of did a little dance when the news of Foxtons demise hit. I am not proud of myself for it, but it is what it is. Anyway, nothing against the Foxton Employees. Notice I did not refer to them as Agents. I feel they are not anywhere near the level of myself and other Agents who do not practice undercutting! Ever since I began in Real Estate I have found it pretty fruitful to go after the Expired and Uncond. Withdrawn Foxtons as there are a great deal of them.
I guess my main qualm with the Foxton Employees is that I resent that they get to "play" Realtor while myself and the rest of us pavement pounders are working 50-60 hour weeks with no cushion of a paycheck sitting in the bank waiting for us. I know some will say well Foxton Employees make much less than we Realtors do! This is probably true, but according to many of the previous customers of Foxtons that I later successfully assisted, they did not provide any where near the services of a Full Service brokerage. Also my biggest problem with the Foxtons of the world is that often they do not accurately input the listings. Many times information such as rooms would be omitted. There were a few that I later took over that according to the listing had no bathroom, nor kitchen. I was pretty sure one actually existed and of course it was proven upon taking over the listing. Point made!
Foxtons Done In By Housing Slump By; Michael L. Diamond Business Writer Asbury Park Press 9/27/07
Foxtons, a West Long Branch - based real estate company that made a splash with its discounted commissions, said Wednesday night it is closing because of a downturn in the housing market. The company said it is contemplating bankruptcy for an orderly shutdown, and will continue only with a skeleton crew; it is laying off 350 of its 380 employees.
"The plain fact is that we have been battling against a real estate market that recently has turned into a sharp decline, and the company no longer has the liquidity to operate as a growing concern," said John D Blomquist Foxtons' Senior Vice President and General Counsel.
The decision marks the latest casualty in the softening real estate industry, and it brings a stunning end to a company that was a lightening rod among real estate agencies. It was founded in 1999 as YourHomeDirect.com by Glenn Cohen, a Shore area entrepeneur who was put off by having to pay 6 percent commission to a real estate agency when he sold his home.His idea: He would pay his employees a salary as opposed to a traditional agency, which pays agents a commission from the sale. In turn, consumers would pay a 2 percent commission.The company would win business through an intense marketing campaign that included agents driving around in purple and yellow PT Cruisers.
The business model, however, was unproven. Real Estate agents were unmotivated to show their buyers Foxtons homes, knowing the commission would not be much. Observers said what Foxtons lost in commissions it would have to make up in volume. "Their business model is based on sales volume, and in this market, you are not going to get the sales volume,"said Albert S. Veltri President and Chief Executive Officer of Veltri Real Estate Associates in Toms River. "With whatever little bit of volume you get with their reduced commissions and high overhead that they have,they were not going to make any money."
Cohen sold his company, which operated in New Jersey and New York state, to London-based Foxtons in 2004 after a tumultuous tenure. He was the target of two lawsuits from women who said he sexually harassed them. Those suits were settled out of court. Foxtons scrapped the business model, raised the commission, first to 3 percent, then to 4 percent and it pledged to offer consumers more services. It changed from PT Cruisers to mini Coopers. When Foxtons was sold in May to a private equity firm for what is said to be $770 million, its' North American operation was not part of the deal. Foxtons in a statement Wednesday night said it has 4400 current listings, and the intention will be to preserve the value of these listings, to minimize customer disruption and to dedicate the anticipated revenues to pay creditors."
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contact: Sherri Bauer 908-334-7174 Prudential NJ Properties
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