[Shades of the early 1990's! This is exactly what happened then, both nationally and locally. If you are a struggling small broker or franchise that just isn't making it in this market, we invite you to give us a call at 661-287-9164 and we can help get you going again with Keller Williams Realty, a national real estate company with over 70,000 agents. Each office is independently owned and operated.]
Friday, October 05, 2007 - By Staff Writer, National Realty News
WEST LONG BRANCH, NJ - Discount brokerage firm Foxtons announced on October 2nd that it will liquidate its business and file for bankruptcy. After 7 years in the real estate business serving the tri-state New York City area, vice president of sales, Mark Horvat, stated that “this action is a direct result of the down turn in residential real estate.”
While many full service brokers welcome the news, it does illustrate the continued difficulty for the industry. The National Association of Realtors’ (NAR) September 2007 outlook predicts continued softness into the 3rd quarter of this year with a 10% decline in year over year sales of existing homes. NAR’s outlook for the 4th quarter of 2007 is only marginally better with a 6% decline in year over year sales.
Foxtons was considered one of the leading discount brokerage firms in the United States. The company started in New Jersey with 40 employees and 2000 square feet of office space and grew to 500 employees and 50,000 square feet in just over 7 years. Until the shut down, the company had planned to expand to major markets around the US but fell well short of that lofty goal.
Industry experts say that discount brokerages are the most vulnerable during a downturn since they operate on smaller margins.
A press release on their website stated that Foxtons is going to ask the bankruptcy court to allow them to authorize the assumption and assignment of their current inventory of listings. This means if the request is granted current customers of Foxtons would be bound by the terms in their listing agreements, regardless of the broker that assumes the listings.
While their listings are still under contract, many clients are asking themselves - What now? For those in the real estate business the real question is who’s next?
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