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
-- Jersey 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 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.