- advertisement -
Columns: Real Estate Adviser
Steve McLinden   Expert: Steve McLinden
Real Estate Adviser
Seller seeks release from listing agency in Chapter 11
Real Estate Adviser

Seller stuck in listing limbo
 

Dear Steve,
I have my home listed to sell with Foxtons of West Long Branch, N.J. They just announced they were closing their doors. They still have 4,400 listings, including mine, but are only keeping 30 employees! I can't get in touch with anyone via agency phone numbers, cell phone numbers or e-mail. I want out of my contract, which is only half expired. I don't feel they're keeping their side of the agreement. How do I get a release without their signature, since they aren't available for discussion? Is this type of thing happening elsewhere?
-- Jersey Jan

- advertisement -

Dear Jan,
So sorry to hear you were left in the lurch with hundreds of other good folks. This type of thing is especially hard on desperate homeowners who are facing foreclosure, or who need to sell because of relocation or family illness or who are suffering under any other kind of duress that necessitates a quick sale. My heart goes out to you.

In a statement, Foxtons said its post-closure intentions were "to preserve the value of these listings, to minimize customer disruption and to dedicate the anticipated revenues to pay creditors." But the company has since filed a voluntary Chapter 11 bankruptcy and is asking the bankruptcy court to authorize the assignment of listing agreements to another broker.

That's a positive step, since there are 30 employees left to handle 4,400 listings, or about one employee for every 145 listings. Even if the contract language on the listing is ambiguous, it's clear this company can no longer effectively represent all its clients before another brokerage is assigned.

James "Beau" Brincefield, one of the top consumer real estate lawyers in the country and author of "How to Avoid the 21 Biggest Mistakes People Make When Buying A Home," weighs in on the situation.

His advice: "Send a written notice of termination of the listing agreement for the company's (contract) breach by failing to communicate with you. Then list the property with another firm." In other words, you aren't obligated to wait for another broker to be assigned, though some brokerages may be a little hesitant until those listing assignments are complete. Hopefully, that's not the case and you can move forward quickly.

As for any similar instances recently, no, this size of agency closure has not been common, even with the real estate industry scaling back in the face of dropping demand. Foxtons brought their aggressive model over from London, offering 3-percent commissions instead of the standard 6 percent. That strategy is most effective when a market is blazing hot, which it was when Foxtons' North American version was founded in 2000. But other agencies were reluctant to show Foxtons' listings because they didn't want to invest their time for much smaller commissions. And when the market dropped, you can see what happened.

I must point out that a Better Business Bureau search before you listed with the company would have uncovered the fact that Foxtons' New Jersey membership in the Bureau was revoked in 2006 after the company repeatedly failed to respond to complaints.

To our other Bankrate readers: Make that Better Business Bureau search a mandatory part of your agency-hiring process. Here's wishing you have better luck with the next agency.

Bankrate.com's corrections policy -- Posted: Oct. 14, 2007
Read more Real Estate adviser columns
Ask a question

 RESOURCES
Sign up for our free mortgage newsletter
Obligation to agent lies in fine print
6 critical questions to ask before listing
 TOP REAL ESTATE STORIES
How to lower your property taxes
Forged signature puts kibosh on home sale
Will mortgage assumption solve crisis?




Mortgages
Compare today's rates
NATIONAL OVERNIGHT AVERAGES
30 yr fixed mtg 3.94%
15 yr fixed mtg 3.04%
5/1 ARM 3.55%
Rates may include points
RELATED CALCULATORS
  Calculate your monthly payment  
  How much house can you afford?  
  Fixed or adjustable rate: Which is right for you?  
VIEW ALL  
FINANCIAL LITERACY
Rev up your portfolio
with these tips and tricks.
- advertisement -
- advertisement -