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Foxtons Almost Gone – About to Become a Footnote in Real Estate History

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:

crying smiley

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  • 15 comments

    15 Comments so far

    1. Smithers September 29th, 2007 10:22 pm

      Quit with the sugar coating; how do you really feel about Foxtons?

    2. Greg Swann September 29th, 2007 11:24 pm

      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.

    3. J. Ferris September 29th, 2007 11:34 pm

      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…

    4. Kaye Thomas September 30th, 2007 11:00 am

      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.

    5. [...] With that, the long list: Daniel Rothamel — Facebook, Why Your Answer to, “Are You on Facebook?” Will Determine the Fate of Your Business in 10 Years or SoonerBrian Brady — Jumping off a cliff, Small Steps Today Prevent Jumping Off A Cliff TomorrowBrian Wilson — Redfin, [Redfin] “I coulda been a contender…”Kelly Roark — Agent 2.0, Agent 2.0: not-so-clever play on ‘Web 2.0’ or the future of real estate marketing?Dan Green — Visa credit scoring, How Visa USA Tried To Scare Us All Into Using Its Credit Scoring Web SiteKevin Boer — Foxtons/AR/Move, Today’s Real Estate Gossip: Move.com Does A Microsoft; Foxtons Does A CountrywideJeff Brown — Little things, Real Estate Investors — The Little Things Count — Big TimeKevin Boer — Reaping the fruits, Reaping The Fruits Of Others’ Labor? Or Adding Value To It?Jonathan Dalton — Princess will come, Someday My Princess Will Come…Jonathan Dalton — Sgt. Hulka, Sergeant Hulka and the Phoenix Real Estate AgentMorgan Brown — Mortgage fraud, When people get desperate, all bets are off.Dan Green — Fed Funds Rate, How Setting The Fed Funds Rate Is Like Shooting Free Throws With Your Eyes ClosedMorgan Brown — Housing glut, Housing Glut, Lennar Revenue off 44%, Other GoodiesRussell Shaw — Foxtons, Foxtons Almost Gone – About to Become a Footnote in Real Estate HistoryJoel Burslem — ActiveRain/Move, Move.com Tried to Buy ActiveRainBrian Brady — Using AR for profit, Activerain.com v. Move.com: The Duplicity at Activerain.comMichael Wurzer — Standards and monopolies, Good Standards Break Monopolies, Not Make ThemRon Ares — Rent vs buy, Addressing the Rent vs. Buy ConundrumDan Green — Data is granular, Why Real Estate Data Is Granular And Not Mosaic, Or One More Reason To Stop Reading Real Estate HeadlinesTeri Lussier — Huber Heights 2.0, My life online and how you too, can create a Huber Heights 2.0Jim Watkins — Down market?, Down Sales Market? Think Outside the BoxBrian Brady — Debunking Guttentag, Debunking GuttentagBrian Brady — NAR and lending, Can the NAR Improve a Buyer’s Financing Experience?Bill Leider — Opportunity costs, Internet Marketing And Opportunity Cost – Connecting The DotsBrian Brady — Advertising to Ashley, Advertising to AshleyDan Melson — Sellers pays commissions, Why the Real Estate Buyers Agent’s Commission is Paid by the SellerGreg Kilwein — Wireless MLS, Wireless Usage On The RiseJillayne Schlicke — Deceptive advertising, Deceptive Radio Advertising in Mortgage LendingTrevor Curran — Old is the new new, Everything That Was OLD is NEW again.Patrick Kapowich — Realtor licensing, Inside the Santa Clara County Association of Realtors’ Convention. Buyer beware? No. It’s Licensees Beware.Erik Hersman — RealUmbrella, Creating the Ultimate Real Estate DisintermediatorDoug Quance — How low?, Ask The Broker: How Much Below The List Price Should We Offer?Larry Cragun — Foxtons, A Darling Of Discount Real Estate Rides Into The SunsetJonathan Dalton — Real estate 2.0, Real Estate 2.0 and the Phoenix Real Estate ConsumerDan Melson — NegAm loans, Trying to Rehabilitate the Negative Amortization Loan – NOT!Jeff Brown — Double-edged sword, Double-Edged Sword — OR — Planning & Discipline — What Does Your Retirement Look Like?Morgan Brown — FHA bailout, A Bail Out is Still a Bail Out by Any Other NameSteve Leung — Hidden factors, Hidden Factors When Calculating a Home’s ValueDustin Luther — Make an impact, 7 Ways to Make an ImpactBrian Brady — AR wuz robbed, Active Rain Wuz Robbed [...]

    6. Laura Brennan September 30th, 2007 5:40 pm

      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?

    7. [...] Edit: Kolleegid Foxtonsist (BloodhoundBlog, inglise keeles) [...]

    8. [...] A changing market might yet turn the fortunes of the discount brokers (see Foxtons Almost Gone – About to Become a Footnote in Real Estate History), but, in an earlier post on the company’s blog, Kelman is still optimistic and insists a that a buyer’s market is just what the company has been waiting for. [...]

    9. [...] Had one well-know rebate company made their big push seven years ago, their ranking on the Success-O-Meter might have been more impressive: More impressive than zero. Russell Shaw spoke to this brilliantly. Their target was (is) the consumer, and it seems that it is the consumer who is ultimately being courted by all of the online portals. Sure, the pay-to-play vendors geared toward the agent population, offering business tools, marketing platforms, lead generation and a paralyzing abundance of other opportunities to achieve untold riches (we are told), are out in force. But, their long-term success is dependent on generating consumer eyes, and they too are feeling the effects of unfortunate timing. Their pitches would have been far more compelling had they not picked this market slump to hawk their wares. Agents are starting to recognize that they need to value engineer their web presence today just like they did they print presence yesterday. [...]

    10. Russell Shaw October 2nd, 2007 11:44 pm

      Here is a link to a must read article by Blanche Evans on this subject: http://realtytimes.com/rtapages/20071002_foxtoniggy.htm

    11. kevin lap October 5th, 2007 5:45 pm

      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!!!!

    12. Christopher S. Garguilo October 11th, 2007 7:55 am

      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!

    13. David October 30th, 2007 4:22 pm

      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…,.

    14. Christopher S. Garguilo October 31st, 2007 5:17 am

      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.

    15. Sue June 23rd, 2008 9:06 am

      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.