An increase in real estate business closures and bankruptcies is an inescapable reality of any housing market downturn, and this cycle has been no different from those past. Though there are no hard statistics that quantify the number of companies that have closed their doors, merged with their competitors or filed for bankruptcy court protection, there’s no doubt that closures and bankruptcies are on the rise and that both large and small real estate companies have been involved.
A search of court records for real estate bankruptcies pulled up hundreds of records of personal and corporate filings, and seemingly no segment of the industry has been immune. The lengthy list of Chapter 7, Chapter 11 and Chapter 13 filings included individual brokers, sales agents, independent companies, franchises, developers, homebuilders, mortgage brokers, property managers, time-share operators and more.
LandAmerica, Foxtons, Help-U-Sell file bankruptcy
Bankruptcies of real estate companies have included:
- LandAmerica Financial Group, which was the third-largest U.S. title insurance company (see Inman News).
- Help-U-Sell Real Estate, a fee-for-service real estate brokerage franchisor that has nearly 1,000 offices in 46 states (see Inman News).
- Foxtons, a cut-rate commission real estate brokerage company in West Long Branch, N.J. (see Inman News).
- WCI Companies, a Florida-based luxury homebuilder (see Inman News).
- Prudential Americana, a brokerage company in Las Vegas that has 1,100 agents.
- Century 21 Town & Country, a real estate brokerage in Rochester, Mich., that has 550 agents.
- Century 21 Aadvantage Gold, a real estate brokerage in Las Vegas with 300 agents.
- Prudential Cranbrook Realtors, a real estate brokerage in Troy, Mich., that has approximately 90 agents.
- Haskins Realty Northwest, a real estate brokerage in Portland, Ore.
- Charlie Orden, broker/owner of RE/MAX Town Centre, a real estate brokerage in Orlando, Fla., that has approximately 60 agents.
- Ron Raitz, president of Real Estate Exchange Services, a 1031-exchange accommodator in Atlanta.
- Robert and Loraine Dyson, luxury-home real estate brokers in Solana Beach, Calif.
Bankruptcy doesn’t necessarily mean a company is out of business. Some, such as Foxtons, do close up shop and liquidate their assets.
But others reorganize and exit bankruptcy or are acquired by their competitors or other saviors: Prudential Americana Group exited bankruptcy in May 2008 and remains the largest brokerage in Nevada, according to a company spokesperson. LandAmerica was bought by Fidelity National Financial. Help-U-Sell was picked up by Infinium Realty Group, a privately held company in Sarasota, Fla., according to Robert Stevens, a spokesman for Infinium.
"Help-U-Sell will definitely continue. The 330 offices are all active and open at the moment," Stevens said.
Still other companies, like Century 21 Town & Country, try to keep their doors open while they attempt to reorganize.
Bill Martin, CEO of the Michigan Association of Realtors in Lansing, Mich., explains that Century 21 Town & Country President John Kersten filed for bankruptcy under Chapter 11, which allows for a reorganization, instead of other options that he says "would have been more devastating." …CONTINUED