- FOXTONS PULLS OUT

Saturday, February 24, 2007

Foxtons has moved out of Connecticut and the mid-Hudson. The discount real estate company laid off between 20 and 30 agents Saturday and has stopped taking new listings in Orange, Ulster, Sullivan, Rockland and Putnam counties. The company plans to concentrate its efforts on its "most favorable market areas," including New York City, southern Westchester County and most of New Jersey, according to a statement yesterday afternoon.
Foxtons will maintain its current listings in the mid-Hudson, according to the statement. It wasn't immediately clear who would service those listings. "I feel bad for all those people who have their homes listed and don't know where their agent is," said one of the laid-off agents, who asked not to be named.
Roughly two dozen agents were summoned to an office meeting Saturday morning where they were asked to turn in their cell phones, laptops and company cars, according to the unnamed agent and other sources aware of the meeting. "They had arranged to have a cab service there, and that's what took everybody home," the agent said. Foxtons built what local following it had, on its cut-rate commissions and its promise to leave more money in sellers' pockets.
But the company's level of service left something to be desired, customers and agents with other firms said. In the end, the company's low commissions might have been its undoing, because there wasn't enough money to attract buyers' agents. "The bottom line, if there are five bi-levels on the market and they're all priced at the same price, the majority of the working real estate agents are going to look for the best incentive," said Chris Scibelli, broker/owner of Keller Williams Realty's Orange County operations.
Scibelli acknowledged that Realtors aren't supposed to shop for commissions, then added, "what happens in practice is a lot different than what happens in theory." As if to prove Scibelli's point, Foxtons is recommending that sellers increase their commissions to 4 percent from 3 percent, and offer the additional money to buyers' agents.