Some of the “we do nothing for less crowd” got very good at marketing themselves to the broad public. They did this at a time when the average busboy or cab driver could have easily listed and sold a house. A few short years ago it was uncertain if the market disruption “full service at a much lower price” companies (yes really, service that is just beyond belief) had gotten a meaningful toehold and were here to stay.
That question is being answered again and again on a daily basis. Foxtons announcement that they were filing bankruptcy is one of my favorites. I don’t like them and I am quite delighted they have failed utterly. It isn’t often that I take delight in any company failing but for them (and anyone like them) I make an exception. They did everything they could to ruin the lives of others.
I want to be very clear on this, I am NOT “against discounters”. I was giving a talk the other day to a group of Realtors and mentioned Foxtons having already closed one office completely and now it looked like they were going to be gone for good. One member of the audience immediately said something about ZIP Realty. Totally different situation. Just totally different. Yes, I inadvertently started a fire (that may never go out) when I wrote this post, but I have nothing against ZIP, and neither does the public. Further, any competing agents who have lost business to them lost it fair and square. ZIP has a website that the public LOVES. Really. We’ve had several potential clients mention to us how much they liked the ZIP Realty site. We have had numerous cross sales with ZIP agents and have had nothing but completely professional people on the other side of any transaction we have ever had with them.
What then is the difference I am protesting here? Why would I have nothing against Help-U-Sell, Assist 2 Sell , ZIP Realty and find Foxtons to be so despicable that I am delighted they are shutting their doors in the United States? Simple, Foxtons did not play fair. Foxtons originally offered no commission for a co-broke but had their listings in MLS. They were then charging a total of 2% commission. After a dust up they raised their prices to 3% and paid a 1% co-broke. This in markets where a competitive co-broke commission was 3%. So far, so good. Then when the other brokers and agents in the areas they operated in tried only paying them 1% when they brought a buyer to the table on a co-broke listing, Foxtons cried, “No fair”! This is clearly “unethical” to single us out. We will go to NAR and the government to get this terrible practice to stop at once!
It was OK for them to do it to others. That was really just fine. But it must not be done to them. No, that is just not right. It is OK if we take money out of the pockets of hard working people who are just trying to feed their families. Hell, they are just salespeople, what difference does it make? They don’t really deserve the money anyway. Please understand, they weren’t taking the money away from “rich people”. One can’t take money away from “rich people” Rich people aren’t the ones that suffer. Working parents (who are Realtors) who probably make about the same amount of money per year as a bricklayer, that is who they were pushing around. Rich people and rich companies don’t get pushed around.
They won’t be the last of the “polished weasel companies” to shut their doors. I’m glad about that too. Here are the only tears that need to ever be shed for them:
Smithers says:
Quit with the sugar coating; how do you really feel about Foxtons?
September 29, 2007 — 10:22 pm
Greg Swann says:
For reference, your post on ZipRealty is consistently one of the most clicked-on entries in our archives. Today it’s number 11 because of the ActiveRain posts, but normally it’s among the top 5 every day. Only Debunking Zillow.com outscores it on a day-to-day basis. The comment stream on that post is immense and enduring. Your post seems to be the Samizdat network for current and former ZipRealty agents.
September 29, 2007 — 11:24 pm
J. Ferris says:
I had the displeasure of dealing with Foxtons and even applied to work there once to escape the misery of a certain yellow and black big box monster. Thankfully I was never hired (free thinker and all) but I can tell you that their “office” was a joke, sparsely furnished and seat of the pants as you might expect, and the listings that I’ve shown were utter disasters. The turnover at Foxtons was nothing short of amazing but the stories I’ve heard about the way they treated homeowners were shocking. When Foxtons decided to pull out of our market (NYC suburbs), they did so with little regard for the people who had listed their homes with them.
Employees were all called in and forced to turn in their cell phones, laptops and company cars at THAT meeting and then had to take a cab home. I suspect the employees had to pay for the ride home though no one can truly be sure.
As for listed homeowners I have heard they were “serviced” but I’ve also heard they weren’t notified and also weren’t let out of their listing contracts so who knows.
It’s not all bad for Foxtons though as their foray into the real estate market forced people to step up their game and I appreciated (as did many home buyers I’ve met with) the fact that all of their listings had floorplans, virtual tours, professional photography and properly filled out MLS data fields. Nevertheless, I am thrilled to see them leave. Zip Realty just set up shop here in New York. It’ll be interesting to watch how that unfolds…
September 29, 2007 — 11:34 pm
Kaye Thomas says:
There is a huge difference between a company that chooses to discount the price of their own service and one who wants to feed off the work of others while giving nothing back.
Most of these “new business” model companies were created during the hottest market ever seen in the real estate community by people who knew nothing about real estate. The true test of a company and a business model is how they survive the tough markets. I suspect we will see a few more bite the dust over the coming year.
September 30, 2007 — 11:00 am
Laura Brennan says:
Advice on Foxton’s? My parents have a contract with Foxtons that is not up until January 2008. They have not been contacted since the announcement. Several realtors have contacted them to list their home and sign a new contract. We are not sure what to do. Can anyone provide any advice?
September 30, 2007 — 5:40 pm
Russell Shaw says:
Here is a link to a must read article by Blanche Evans on this subject: http://realtytimes.com/rtapages/20071002_foxtoniggy.htm
October 2, 2007 — 11:44 pm
kevin lap says:
I think what Foxtons did to thier employees and clients was very unethical and they should be sued until the owner of Foxtons is living so poor that he cant even afford a pack of gum. Good Luck TO ALL FOXTONS EMPLOYEES IN THIER LAWSUITS!!!!
October 5, 2007 — 5:45 pm
Christopher S. Garguilo says:
I lived in Brooklyn, New York when FOXTONS first came on board and launched a massive marketing campaign. Their ads were all over the radio blasting that they were a 2% company that offered a full service. They gleefully played commercials with property owners lauding that they had a team of experts marketing their property. I laughed, but not at the commmercial. I laughed knowing that you could not pay this “so-called” team with a 2% commission and they could survive, unless this team lived in the basement of their parents’ house and never had to spend money for a meal.
They made their money during the real estate boom. If they sold some homes they did so because houses were staying for one to two days on the market. So property owners did not want to pay 6% commission. But I knew they would not survived once the market cooled down.
The point is: it cost money to sell your home. Period. There is no two ways about it. That’s all I have to say about that!
October 11, 2007 — 7:55 am
David says:
Hi I signed up with foxtons and they never put me in the MLS system. They they were going bankrupt i complained to them and they sent me this letter.
In your opinion was this release I got enough for them not to take me to court if I sell on my own
RELEASE FROM EXCLUSIVE
Multiple Listing # N/A Date 10/10/07
Supplemental agreement to listing contract dated 9/17/07
To all Participants of the multiple listing service of
It is hereby agreed between Smith (property owner)
and Foxtons, INC (listing realtor)
that in consideration of the release of the property located at 20 Smith Street listed under the said exclusive right to sell contract, it is mutually understood and agreed between the parties hereto that the owner of the property represents that there are no negotiations pending with anyone for the sale lease with option to purchase or exchange of said property and that the release is void if negotiations are pending.
The property owner acknowledges receipt of a copy of this release agreement.
Listing Realtor (signed by person in foxtons)
one week ago a buyer came to me and we are in contract now. My old real estate agent called and said foxtons went through bankrupcy court and sold listings to fillmore and I am still bind by the original contract and they will sue me.
If I selll do they get commisiion. They havent did anything plus I got this realease please help!!!!!!!
Thanks I am so crying…,.
October 30, 2007 — 4:22 pm
Christopher S. Garguilo says:
Look for a Real Estate Lawyer. If you have a copy of the listing agreement, take it to the lawyer. Many people will offer you advice, but this is a tricky one. Let the lawyer read the listing agreement and see if the “Exclusive Right to Sell” is transferable.
Since Foxton’s probably only charged 1% to the listing agency, the commission may not be that large. But again, it should be investigated by a Real Estate Lawyer.
Good Luck.
October 31, 2007 — 5:17 am
Sue says:
David, I am wondering what ever happened with you situation. Foxton’s was not well thought of around here and I have heard many stories of people just sitting and waiting for the listing agreement to run out so they could list with another agency. They were very tough on release.
June 23, 2008 — 9:06 am