Good riddance Foxtons

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Posted by Jim on Oct 1, 2007 88 views

If you owned a home in New Jersey then you have been victim to the total jerk offs at Foxtons. For the past few years they have been flooding the junk mail trash can with offers - 100% bogus - that people wanted to buy a home on my street. Would I be willing to let them sell my house? And of course this buyer never existed. And the other stunt was cheapest commission rates.

Now in a sellers market you know how people get suckered into dealing with this shit outfit - greed to not pay a higher commission for an easy sale. But now Foxtons is done in by the housing slump. And to make it even sweeter, this news was reported on my birthday in the Asbury Park Press.

Foxtons, a West Long Branch-based real estate company that made a splash with its discounted commissions, said Wednesday night it is closing because of a downturn in the housing market.

The company said it is contemplating bankruptcy for an orderly shutdown, and it will continue only with a skeleton crew; it is laying off 350 of its 380 employees.

“The plain fact is that we have 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,” said John D. Blomquist, Foxtons’ senior vice president and general counsel.

The decision marks the latest casualty in the softening real estate industry, and it brings a stunning end to a company that was a lightning rod among real estate agencies.

 –with shit on the end of that rod, which explains the stench

It was founded in 1999 as YourHomeDirect.com by Glenn Cohen, a Shore area entrepreneur who was put off by having to pay a 6 percent commission to a real estate agency when he sold his home.

–Never heard of Sale by Owner?

His idea: He would pay his employees a salary as opposed to a traditional agency, which pays agents a commission from the sale. In turn, consumers would pay a 2 percent commission. And the company would win business through an intense marketing campaign that included agents driving around in purple and yellow Chrysler PT Cruisers.

The business model, however, was unproven. Real estate agents were unmotivated to show their buyers Foxtons homes, knowing the commission wouldn’t be as much. And observers said what Foxtons lost in commissions, it would have to make up in volume.

“Their business model is based on sales volume, and in this market, you are not going to get the sales volume,” said Albert S. Veltri, president and chief executive officer of Veltri Real Estate Associates in Toms River. “Whatever little bit of volume you get with their reduced commissions and high overhead that they have, they are not going to make any money.”

Cohen sold his company, which operated in New Jersey and New York state, to London-based Foxtons in 2004 after a tumultuous tenure. For example, he was the target of two lawsuits from women who said he sexually harassed them. Those suits were settled out of court.

Foxtons scrapped the business model, raised the commission, first to 3 percent, then to 4 percent, and it pledged to offer consumers more services. And it changed from PT Cruisers to mini Coopers. But when Foxtons was sold in May to a private-equity firm for what Reuters said was $770 million, its North American operation wasn’t part of the deal.

–Wonder when the used car sale will be? Or will the agents try and drive the cars to death until someone comes knocking to pick them up from their driveway?

Foxtons in a statement Wednesday night said it has 4,400 current listings, and “the intention will be to preserve the value of these listings, to minimize customer disruption and to dedicate the anticipated revenues to pay creditors.”

–HAHA - the value of its listings? Real estate listings are not worth anything unless you are going to have brokers and agents available to handle the sale, and people who want to buy your property. Where are they going to get the money? And I am sure any home seller is going to drop them as their agent as soon as they hear about this story. Unless of course Foxton’s continues to be the dicks they are are argues to keep the listings.

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