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No one boxed them out except themselves. They were in the MLS, their properties were shown, when they responded & provided the info needed to show them. They simply didn't execute the primary goal of a listing broker, which is to effectively MARKET thier clients properties. So they went out of business. And of course there are flat fee alternatives, because for some people, that model is appropriate. Foxtons problem was that they were trying to convince people they could offer "full service" on the lower commission, when in fact they could not.
Actually the free market had the last laugh. Foxtons could not pay the bills while charging a 2%-3% commission, despite all the advertising hype. If the model was good, they would have made a fortune and the put the rest of us out of business. But gee, it turns out that selling a house and getting it to a closing actually DOES take a lot of effort, experience, and, of course, money.
-Marc
Agree 100%. I do not like to start arguments but this is sheer fact. In this market these days, anything less than 6% is not working well. There is so much inventory, you need a high commission offering to get agents in the door. The more offered, the more likely your property will be shown. With Foxtons, I knew VERY few agents that wanted to show their listings because of:
A) the low commission
B) The IMPOSSIBILITY to contact someone at Foxtons. As a result you as the agent did ALL the work for Foxtons' sellers and your customer! Why would I do ALL this for a simple 1%?
Agree 100%. I do not like to start arguments but this is sheer fact. In this market these days, anything less than 6% is not working well. There is so much inventory, you need a high commission offering to get agents in the door. The more offered, the more likely your property will be shown. With Foxtons, I knew VERY few agents that wanted to show their listings because of:
A) the low commission
B) The IMPOSSIBILITY to contact someone at Foxtons. As a result you as the agent did ALL the work for Foxtons' sellers and your customer! Why would I do ALL this for a simple 1%?
tool,
Foxton's 2% commission plan was for exclusive listings, so you'd never have to take "only" 1% -- those weren't available to you (if you were even an agent back then).
Foxtons' MLS listings were 3.5%, with 2% going to the selling agent.
2% on a $600K was a nice $12K -- during the boom years, you could've easily sold 5 of these per year, for a cool $60K
but no, you all wanted more, and yes you did box them out.
realtors admitted to me that they black-balled Foxtons listings, so as to drive them out of business, else 2% commissions became the norm.
good thing that consumers are now more educated, and online listings will put a serious dent into the monopoly that the guarded MLS enjoys.
R.E. agents, stock brokers, and used car salesman have alot to fear from the internet, as access to information will make their jobs obsolete.
Foxton's 2% commission plan was for exclusive listings, so you'd never have to take "only" 1% -- those weren't available to you (if you were even an agent back then).
Foxtons' MLS listings were 3.5%, with 2% going to the selling agent.
2% on a $600K was a nice $12K -- during the boom years, you could've easily sold 5 of these per year, for a cool $60K
but no, you all wanted more, and yes you did box them out.
realtors admitted to me that they black-balled Foxtons listings, so as to drive them out of business, else 2% commissions became the norm.
good thing that consumers are now more educated, and online listings will put a serious dent into the monopoly that the guarded MLS enjoys.
R.E. agents, stock brokers, and used car salesman have alot to fear from the internet, as access to information will make their jobs obsolete.
Tiny,
You don't know what you're talking about. You have the facts screwed up. Foxtons charged 3% and paid 1% to the selling broker. Not 2%. They only upped their commission to 4% and offered 2% co-broke at the very end out of sheer desperation, but it was too late to save themselves from their own abject incompetence. They were a bad company. They were poorly organized. Their agents were poorly trained. They were poorly managed. They took BAD care of their customers. They were incompetent at the basic mission of selling a home AND getting it to a closing.
They boxed themselves out and self-destructed based on sheer greed and boundless laziness.
The idea that agents refused to show their listings is ludicrous. All their listings were in the MLS and on Realtor.com. WE DO NOT PICK HOUSES FOR OUR CLIENTS AND HAVEN'T FOR YEARS. For the most part, people decide for themselves what to look at these days. The Internet has largely supplanted the home selection function of Realtors.
So, Foxtons listings were in full view on the MLS and on the Internet. The public could simply select one of their listings and inform their agent that they wanted a viewing. They had to be shown regardless of the co-broke. I showed many of them myself.
Unfortunately, Foxtons homes were largely:
1) Priced incorrectly
2) Poorly staged
3) Difficult to access
4) Badly photographed
5) Inaccurately described
6) And their sellers were improperly advised regarding items like underground storage tanks, structural issues, cosmetic issues, and safety issues.
7) Property disclosures were incomplete, inaccurate, or missing entirely
They did not fail for any reason other their own abundant incompetence and unprofessionalism.
To bring a home to market, present it in its best light, properly priced, properly staged, and ready to sell cosmetically and structurally takes training, time, expertise, and expense that Foxton's never had the remotest clue about.
I won't even get into the juggling and negotiation that take place after the contract is signed. Keeping 2 often adversarial parties together through closing is not a job for an amateur, and Foxton's was an organization of rank amateurs.
Just setting the record straight. In a free market, a successful company must provide competent service to remain in business. Foxton's did not accomplish this, and they are solely responsible for their own demise, and rightly and justly defunct.
Foxton's 2% commission plan was for exclusive listings, so you'd never have to take "only" 1% -- those weren't available to you (if you were even an agent back then).
Foxtons' MLS listings were 3.5%, with 2% going to the selling agent.
2% on a $600K was a nice $12K -- during the boom years, you could've easily sold 5 of these per year, for a cool $60K
but no, you all wanted more, and yes you did box them out.
realtors admitted to me that they black-balled Foxtons listings, so as to drive them out of business, else 2% commissions became the norm.
good thing that consumers are now more educated, and online listings will put a serious dent into the monopoly that the guarded MLS enjoys.
R.E. agents, stock brokers, and used car salesman have alot to fear from the internet, as access to information will make their jobs obsolete.
You must be joking! You are telling me that when I went to show Foxtons listings I was guaranteed 2%? Wow you are sadly sadly mistaken! This was a rarity and when it did sometimes occur it was toward the end of their business run. I showed PLENTLY of houses that Foxtons had 1% commission offerings. Get your facts straight first before you start attacking!
As for Foxtons agents, they were VERY uneducated for the most part, and to prove this fact, most of them if I recall were salaried making about $30,000 a year. Why would a successful realtor choose to work for a company that they will only make $30,000 a year when they could go commission; especially at that time in the market and make MUCH more.
I have a commercial building on the market now. 5-1/2 total. 3-1/2 for buyers agent. 5 if it is sold to an in house agent.
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