Debi:  I thought that because they had ceased to fully service the contracts that there was a good argument that they were the first to breach the contract and that the clients would be cut loose.  After all, they cut nearly 90% of their staff on one day's notice!  It was as if the listings disappeared into a black hole of limbo for about a month - a critical month at that - once the holiday season hits in force, buyers take a break.

Lenn: Thank you for the interpretation fo the ruling. See above for what i thought would happen. I had to go LOOKING for the court ruling. I was looking at earlier posts and realized that it had been about one month since they went into chapter 11.  NOT A PEEP!!!!  They CLAIMED they were a "full-service" brokerage offering a "full commission" for buyers agents....yeah....right.  For a buyer's agent it was a pain.  I knew that if the owner didn't respond promptly I was in for a "phoning marathon" just to get into one of their listings.  They seemed to have NO idea where I was from and they would keep bouncing me around.  I kept getting people in the wrong STATE trying to find the listing status.  Also, if my clients made an offer, I knew it was going to be torture to bring it to the closing table.  I never closed with them - but I heard a couple of WILD stories. Also, the listings themselves had so many mistakes in them that several were listed in the wrong municipality - total incompetence. 

Bill: They were victims of their OWN incompetence....The volume required to make that model work was beyond their capacity to handle.  

Bill:  I think I would give the new brokerage a "try." If would offer to pay full commission in return for better service. If I wasn't satisfied after a month, I'd do what you say because once Thanksgiving hits - things get very, very quiet. 

Josette: The trouble is that unless the seller is willing to PAY MORE, the service isn't going to be much better. It really is nearly impossible to move a property on such a low commission unless the market is red-hot.

 Ginger & Roger: You are right about the signs...GREAT signs - they stood out and they were able attract attention with them - but everything else was a disaster!

Rebecca: I found something from a seller saying they weren't responding to any phone calls.  I'll try and find it and post it.  There was another story about someone who DROVE TO THEIR NJ OFFICE and refused to leave until he was let out of his contract.  That was about 2 days after they filed for chapter 11.  Apparently, it worked.  I don't know if others followed his lead.  

Christy:  Although you get what you pay for - and people should realize that, all the media hype  about agents making out like bandits does - unfortunately - make a mistake like this somewhat understandable.  These sellers  got far worse than cut-rate service - they were abandoned completely and are being forced to ride out a contract that most feel foxton's broke. According to this one letter written by a disgruntled seller, Foxtons had over 4400 listings - which were left in the hands of some 30 employees for  one month.  They would not respond to inquires and would not answer the phone. I will revise the blog with the link  because I think its important for all readers to see.

Amanda: I'm not holding my breath.  The talking heads are convinced that there is a cheap and easy way to do real estate sales - and God forbid a little thing like one their discount darlings going under while leaving their sellers twisting in the wind should change their minds. 

Thanks Lee. Do you still do sales? It looks like you aren't an AR member - so thanks for stopping by.

You get what you pay for....but this is far worse than anything anyone bargained for. The only thing I will say is that complaints about Foxtons were everywhere, so any INFORMED consumer should have been wise enough to steer clear.  For those who are over-extended - this is truly a nightmare.  If the clock is ticking on a foreclosure -WHAT A MESS....Foxtons was notorious for not letting people cancel their contracts. You were STUCK. Sometimes an aggressive agent would step in and help - but that's a fine legal line you are walking when you do that.  

Thank you Marcia - I left a response on your blog.  I'm sorry that I somehow missed the blog.  I had been trolling the internet wondering what was going to happen to the listings and WHEN the decision was coming.  My main issue was that the sellers were left with listings and NO BROKER for nearly a MONTH. That's a long time in real estate:

I'm responding to someone who I deleted.

This discussion is NOT unethical. The issue has nothing to do with capabilities of the brokerages who took the listings.  READ THE POST.  I never implied lack competence on the appointed brokerages – I have never said anything AGAINST these brokerages.  Indeed, AR saw fit to feature the blog and there have been more than a few comments on it and the only person who had a problem was you. 

The question is a legal one.  Legally, did Foxtons lose the right to sell their listings when, by all reports, they failed to fulfill their obligations for said listings for nearly one month?  For nearly one month they were out of communication with their clients.  They could not be reached by email or phone.  In effect, a legal argument could be made that they abandoned their listings and had no right to sell them. The sellers simply had to wait for the legal process to sort itself out and hear the results on the NEWS for God's sake.  As I said – and will keep saying – a month is a long time in real estate. We are nearing the holiday when markets slow down. Many of these sellers will be stuck until next spring.  For a home in foreclosure or for a seller who has already moved and is carrying a bridge loan the situation is more than inconvenient. 

Further, since other brokerages may go belly up in the future, will this start a new "trend" for the future in which brokerages in financial trouble have the ability to sell off their listings to pay down debt.  Most sellers assume that if their broker goes broke, they get to CHOOSE who represents them in the future.  These sellers may be very happy with the brokers who represent them from here on - but it would have been decent for them to have had a CHOICE and it would have been nice for them to have been released sooner so they could have moved on with the sale of their home rather than being left to dangle for so long.  For these sellers, the matter of choice is probably moot.  Their best bet right now is to work with Realtors they have been given who are probably doing their best to move their properties.  I do not envy them their task.  These brokerages have a set of anxious, nervous and angry sellers to deal with. 

BUT  the LEGAL question remains - even though the judge ruled in Foxtons favor - does this make LEGAL sense - judges have been wrong before.

I try to respect differing opinions and in fact I almost never delete comments - but you really crossed a line on two levels: you appeared to be heavily impugnimg my ethics and then you wouldn’t take “No, I’m not having this argument” for answer.  Please don't FORCE a response like this again by saying you will post again and again until I answer.   Thank you in advance for your cooperation.  

It's a point of law.  Laws are subject to interpretation.

Are they allowed to release the clients? Depends on the nature of the contract - which I have not seen. Are the clients allowed to seek compensation because of what happened - yes.  Its called  a law suit and the merits of said suit are hashed out in a court of law. 

However - when Foxtons failed to act as brokers for a MONTH, the issue gets more clouded.   There are two sides to a contract. The Foxtons sides  is obliged by LAW  to uphold their end. They did not. They ceased to act as brokers when they fired 350 employees leaving 30 to handle 4400 listings. Thats nearly 150/ employee.  One its face - it is obvious to anyone with any common sense that they could not fulfill their obligations with this kind of a staff on hand. By not continuing to fulfill their function - those contracts may well be null and void.  Lenn - who I have a lot of respect for - agrees with you.  But my father and another real estate attorney that I work with, agrees with me.  And I have a great deal of respect for their opinion as well. (My father practiced and sometimes still practices real estate law in NYC.) According to them, much depends on the exact wording of the contract. Also, there may be differences in State law between NJ and NY.  

Yes, the creditors have their rights - however - if they had wanted to remove all SHADOW of a doubt - Foxtons should not have reduced their staff to levels where it was impossible for the employees to truly perform their function.  Thats the action that clouds the issue for a lot of people .  Those who signed a contract in good faith had the right to expect CONTINUOUS service through the filing of Chapter 11 right up until the day the new brokerage was appointed. That part of the issue is not trivial - and will be debated. 

It looks as though the brokerages are now doing the best they can for their new clients - If any of them would call me at this point (I had one call me about a pet-friendly unit when this started - I told them they needed to see what the law was with respect to their contract and that was in limbo and we left it there.   I would tell them the truth.  WORK WITH WHAT YOU'VE GOT!! You now have a brokerage in charge - listen to their advice and do what is necessary to sell your property. The faster they put all of this behind them, the better off they will be. I can't imagine any settlement being worth more than just getting on with the process.

I think it is an interesting and worthwhile debate...and one that should be discussed openly. Once we start fearing the DOJ to that extent - its time to pack our bags and MOVE to another country.

Have a great weekend...and enjoy the fall weather!

Hi Laurie,

The one thing they did right was print ads. But my experience with them and some of the experiences of my colleagues were just jaw dropping. I won't repeat them on a public forum...its not appropriate.  There were other issues with the posts that you can't see.

Every brokerage that I have interviewed with has had a policy of releasing clients from a listing. I could understand wanting to have out-of-pocket expenses covered, but beyond that, who would want a listing where your client was hostile?  So far, I have been content to let people move on without asking them to cover anything - but I could understand it on large listing where there have been large expenses.