Market claims NJ broker, Foxtons
By Matt Carter, Wednesday, September 26, 2007.Bookmarking Sites
Foxtons -- the London-based discount real estate brokerage that in a little more than seven years grew to 500 employees serving New Jersey, New York and Connecticut -- issued a press release late Wednesday saying it was laying off 350 of its 380 remaining employees and may file for bankruptcy protection.
A finalist for the 2007 Inman News Innovator Award, Foxtons blamed the decision on a "sharp decline" in the real estate market.
"Foxtons is well run, very efficient, has a great team and has pioneered a new model in the real estate business – a model which has proven itself and, we believe, will have lasting influence on our sector," John D. Blomquist, Foxtons’ senior vice president and general counsel, said in a statement.
Blomquist said Foxtons has "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 going concern.”
Foxtons said intends to "preserve the value" of its 4,400 current listings, while minimizing customer disruption and dedicating anticipated revenues to pay creditors.
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Submitted by Anonymous on September 27, 2007 - 7:42am.
I live on the same block as one of their agents, and his Foxtons car is often parked in the same spot for days at the time, which tells me they're hardly keeping themselves busy.
I think their problems can be traced back to their day one (1999?): first they came out with a 2% commission model, and marketing campaing calling other Realtors as sharks(!). Sure they've got the attention of the public, but they've also managed to alienate most of other real estate agents and brokers. Then they've hired (everyone was a salaried employee) people straight out of college, with no prior experience in real estate, and gave them company-owned Mini Coopers, laptops, cellphones, leads, and a salary of $25k/yr plus $500 commission per each sold home. No wonder that experienced agents were not eager to join them. Having to keep 500 people on a payroll didn't help their bottom line either.
Hats off to them, for having solid presence in our area, built around their listings, Mini Coopers, and top-notch website.
R.I.P. Foxtons...
Submitted by Anonymous on September 27, 2007 - 8:29pm.
I first time a saw a Foxtons agent at my first local board meeting I wondered why they were hired by Foxtons. They didn't seem to "fit". Most agents I know did not show Foxtons listings. I did show one of their listings (when they were giving out (1%) and the listing agent never called me for feedback (I always do). Other listings I showed always seemed to be over priced - I quess that was why many expired in my area. They were good at putting their cheap signs all over the place, even breaking local town laws for signs.
Submitted by Anonymous on September 28, 2007 - 6:39am.
We learned a few things from foxtons, blueedge, and others that promoted 1-3%. They had the right idea but failed at
leveraging risk. Unlike others that distribute risks amongst all their agents these 1-3% brands assume all the risks by paying a salary.
To its credit Foxtons was the Redfin of 2000.
Submitted by Anonymous on September 30, 2007 - 3:53pm.
We salute Foxtons for its efforts to bring change to real estate. But Foxtons is different from Redfin in several respects:
1. Foxtons isn't a technology company, but Redfin is. Redfin was the first company to display listings on an online map. We use technology to attract customers, and to support customers through the home-buying process. It seemed like Foxtons was simply trying to be cheaper, rather than more efficient or better.
2. Redfin is focused on customer satisfaction. Redfin systematically measures customer satisfaction, and has published results indicating that we generate better results for our client than a traditional broker. The reason that Redfin's business has grown as much as it has in 2007 is because of the company's high levels of customer satisfaction, a foundation on which we hope to build long-term growth.
3. Redfin listings pay a full commission to the buyer's agent. We only seek to offer our clients a better price for our own services. For a listing to get showings, it is in the best interests of our listing customers to offer the traditional commission to buyers' agents.
4. We are focused on buyers, not sellers, so in a buyer's market our business proposition is better, not worse.
Submitted by Anonymous on October 1, 2007 - 9:15am.
Glenn, I have confidence in the Redfin model. My only skepticism is in its future success when listing companies begin to offer no or low co-broke ( $1? ).
I agree that Foxtons is very different from Redfin. Foxtons is the 1.0 of real estate change. I have personally benefited from their 1.0 beta just as your company has successfully branded the rebate model. I look forward to seeing better result from companies attempting the salary model.
MASS MARKET - SALARY - DISCOUNT MODEL = 1.0
We're waiting for what is next..
Submitted by Anonymous on October 1, 2007 - 11:36am.
I think that we are going to start to see a 180 degree turn around from the discount brokerages. We will see more of a vertical integration with one stop shops that focus not only on selling real estate but also financial planning, lending, investing and legal.
Chris
www.buynsellohio.com
Submitted by Anonymous on October 5, 2007 - 4:41pm.
WHAT FOXTONS DID WAS VERY UNETHICAL, A LAWSUIT IS IN ORDER AND I BELIEVE THE AGENTS SHOULD GET A HUGE SUM OF MONEY FOR WHAT THE COMPANY DID TO THEM!
MARK HORVAT AND JOHN CUNT SHOULD BURN!!!!
Submitted by Anonymous on October 5, 2007 - 4:44pm.
FOXTONS WAS VERY WRONG FOR WHAT THEY DID! THEY SCREWED ALOT OF PEOPLE OVER AND THEY ARE PEOPEL WHO HAVE FAMILIES TO SUPPORT! THESE AGENTS DESERVE EVERYTHING THAT FOXTONS HAS! fOXTONS DESERVES NOTHING!
Submitted by Anonymous on October 5, 2007 - 4:48pm.
WHAT FOXTONS DID WAS VERY UNETHICAL, A LAWSUIT IS IN ORDER AND I BELIEVE THE AGENTS SHOULD GET A HUGE SUM OF MONEY FOR WHAT THE COMPANY DID TO THEM!
MARK HORVAT AND JOHN CUNT SHOULD BURN!!!!
Submitted by Anonymous on November 6, 2007 - 10:29pm.
This was definitely coming for a while. Cannot spend the way the North American Foxtons arm did charge such moderate fees and not expect your business model to tank. The model would work with some modification to their spending on marketing and employee support. I was a former Foxtons Agent myself so I am sorry to hear of my former co-workers misfortune, but it may prove to work better for you. Contact me for help in transferring your lic to a better agency. I can get you a great split and awesome working environment with killer support. To any of Foxtons Selling clients, contact me as well as I can offer you the same deal you had with Foxtons as well as some additional bonuses/benefits you did not have before. Call Justin Pandelo @ 888-ICE-1-VIP.
Submitted by Anonymous on January 10, 2008 - 8:21am.
Having read through these articles, with much time having passed since the news of the Foxtons US demise, I often wonder whether any of the existing, non Foxtons agents have learnt from any of the things that Foxtons did so well?
Having worked and learnt my trade at Foxtons UK I feel that whilst they, like most agents in part, have a bad reputation, both buyers and sellers use them. They use them because they have the market share of properties so they end up having to use them. In business, just as in life, things don't always go to plan but Foxtons managed to shake up the industry in the US just as it did in the UK. We all know and believe twe would have done things better if it was our company but the fact of the matter is that Foxtons did things their way and it worked - what didn't help was the market.
Submitted by Anonymous on January 10, 2008 - 1:54pm.
Foxtons has helped to motivate many web based models and we owe a great deal of gratitude to the entire Foxton's team. Without a doubt their model worked but it failed to work with the marketplace. Many products, services and patents work yet most fail because they are not compatible with the market.
I learned from Foxtons never to associate a company with the word "discount" no matter how great the service or product. Many agents frown on discount companies but a closer look reveals many so-called full service brokers are no more effective than discount brokers.
Last year my company received a federal trademark for "nodiscount process" to identify our proprietary marketing process for the purpose of challenging current full service claims.
Foxtons redefined the saying, "If you don't list, you won't last" because it's possible to obtain thousands of listings and go bankrupt.
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Submitted by Anonymous on January 14, 2008 - 7:26am.
Foxtons and Discount?!
In the UK they are a shabby "mass market" provider trying to lure proles into their crooklike business by driving them around in those Minis.
When it comes to pricing, their offers are between 10 and 50% overprized at least in the UK compared to other, more serious competitors. And they do not do their jobs when it comes to maintaining "serviced" appartments.
As well as their homework when it comes to paperwork (they simply have one of their agents "sign" a tenancy agreement and it is never signed by a landlord, etc.)
So no wonder they are gone and no tears for them.
Hope, they'll do the same in the UK any time soon.
Submitted by Anonymous on January 20, 2008 - 11:11am.
Within only a few days having passed since I last wrote a comment piece it seems we are all getting carried away with things and moving away from commenting on the business practice that Foxtons was in part so successful at but now we seem to be 'slating' Foxtons. What Foxtons brought to the US was a dynamic approach to real estate and one that in most part would have continue to work had it not be for a slump in the property market. This slump was the main factor in Foxtons being unable to stay competitive as they went down the route of discounting their offering so much that when the slump hit the margins of profit were so small for them to make a return. when you compare this to the model in London, like the US, their strenght lies in the fact that if you want to buy in London or greater London you have to come to Foxtons as they have the majority of listings/properties so they have the control - surely this is good business? Where it differs in the UK to the US is that they don't discount in the UK but felt the need to in the US because of the slowdown in the market. The London offering netted £450m net profit in 15 odd years and it wouldn't have surprised me if had it not been for the deterioration in the US property market that they would (had they not discounted) amounted to the same figure if not more there. Long live the firms that are able to be different and make it work, Foxtons made it work but made the error in discounting and ultimately de-valuing their service offering.
Submitted by Anonymous on January 21, 2008 - 8:48am.
>>>>the slump hit the margins of profit were so small for them to make a return.>>>>
Respectfully, I must disagree. A successful model makes a return in all markets. Perhaps a better way to put this is Foxtons was not right for the marketplace. I've seen companies charge the same as foxtons ( or less ) and are still in business. You can't blame a marketplace when you offered a lemon product.
Perhaps you didn't charge enough.
Perhaps you failed to communicate with the market place including other agents in the market place.
Perhaps your overhead was too high.
Perhaps you had too many listings but failed to convert to sales.
Perhaps it was poor management.
Perhaps it was poor employees.
Perhaps it was poor hiring.
Perhaps the product didn't have mass appeal.
Perhaps the product looks good, smells goods but failed to work.
All this translate into a lemon product.
Submitted by Anonymous on January 23, 2008 - 8:17am.
I do have to agree with you that I to blame the market soley is probably the wrong thing to suggest as it was the offering that didn't help things for them when they then proceeded to discount by so much. The fact is that over the course of 7 years Foxtons USA succeeeded where many other agents failed. They possibly created so big a monster that as it was a new addition to the marketplace that they didn't learn from any mistakes made in the early couple of years of trade. When you add the slump in the market to the discounting that points to the low margins of profit. The mistake was spreading themselves so thinly however they changed the marketplace for the better in most parts and added a much needed bit of energy into a market which traditonally... lacked energy.