Realtor Foxtons Shuts Its U.S. Operations

A discount realtor that brokered home sales for a 3% commission, Foxtons, shut its American operations and may file for bankruptcy amid the slowing housing market. The company laid off 350 of 380 employees, West Long Branch, New Jersey-based Foxtons said Thursday in an e-mailed statement. It had realty offices in New York, New Jersey and Connecticut.

"The plain fact is that we have been battling against a real estate market that recently has turned into a sharp decline, and the company no longer has the liquidity to operate," the company's senior vice president and general counsel, John D. Blomquist, said in the statement.

American home prices will fall 2% to 4% this year and "more next year," the chief executive officer of Fannie Mae, Daniel Mudd, said. The National Association of Realtors forecasts the first national decline in the American median price since the Great Depression. Existing home sales will fall 8.6% in 2007, according to the Chicago-based Realtors group, which represents 1.3 million real estate agents. The predicted drop exceeds the 6.8% estimated by the group a month ago. The trade association has lowered its forecast nine times this year.

Foxtons paid real estate agents a salary and a 3% commission rather than the traditional 6%, according to its Web site. The idea failed to catch on because agents from other companies, who worked solely on commission, were reluctant to show homes listed by Foxtons.

"I'm amazed they lasted as long as they did," a real estate agent in Bergen County, New Jersey, Kathy Platt, said. "They don't provide any service."

The company was part of Foxtons Ltd. until earlier this year, when the London-based parent accepted a buyout offer from the British firm, BC Partners Ltd. Foxtons's British founder, Jon Hunt, retained the American branches as part of the transaction.

Mr. Hunt didn't return telephone messages seeking comment left at his London office.

Foxtons's American operation started as the independent company YourHomeDirect.com and was later bought by Mr. Hunt's business.

Its American operations lost $16.1 million in 2005, compared with an 11.85 million-pound pretax profit in Britain, according to the latest annual report filed at British business registry Companies House.

The company has 4,400 homes listed for sale in America and said it plans to use the revenue from those deals to pay creditors. A spokeswoman, Gina Longo, did not immediately return an e-mail message asking how clients should reach the company after their agents were fired.

"I got at least three or four phone calls today," an attorney in the Queens borough of New York City who represented sellers listing property with Foxtons, Richard Lovell, said. "They were all very concerned. It's going to make the logistics more complicated. The attorneys and buyers and sellers are going to have to jump in and do a little more work."

The company's closure of its New Jersey operations was reported earlier Thursday by the Asbury Park Press.