Real estate discounter Foxtons today will begin to change its commission structure in three New Jersey counties. The move is part of a county-by-county phase-in of a new business model that will spread throughout all of Foxtons’ U.S. operating areas in Connecticut, New Jersey, and New York by the end of the year, said Van Davis, Foxtons president and CEO. Foxtons, which has offered limited real estate services for as low as a 2 percent total commission in real estate transactions, is upping its commission structure to a minimum 3 percent while upgrading its real estate services.
Davis, who took over in July, said that since his arrival he has worked to identify company strengths and weaknesses. “One glaring opportunity that really jumped out me. Although we have made significant inroads with 2 percent models, we have not been able to address all of our sellers’ – and for that matter all of our buyers’ requirements. American consumers really want a full-service real estate experience. The thing they don’t want is to spend a full commission,” Davis said. “Our belief is that the American real estate market is one that is ripe for change.”
Under the new commission structure Foxtons will get 2 percent of the total 3 percent commission, and the other 1 percent will go to the agent on the other side of the transaction. “We will have agents that focus only on sellers and agents that focus only on buyers.” Foxtons was originally launched in March 2000 as YourHomeDirect.
The company later received a $20 million investment from London-based real estate company Foxtons, and its name changed to YHD Foxtons. In April 2003 the “YHD” was stripped from the Foxtons name. London-based Foxtons bought out the U.S. discounter’s founder, Glenn Cohen, in March of this year.
Foxtons is ramping up its sales force as a part of its new business structure. “We’re in the process of hiring over 100 agents. We’ve already brought on almost 50 in the past month,” Davis said, with plans to hire another 50 agents within the next three months. That will bring the total sales force to about 175 to 200 agents, he said. The salary structure for agents may see some small changes, he said, and the company’s compensation will features a base salary, full benefits, access to a company car, and additional compensation for productivity and the ability to generate leads.
The company will still maintain a call center as it has in the past, though there “might be some slight changes,” Davis said. And there will be some “significant changes” to the company’s marketing program, he said, as company officials have been conducting “a complete analysis of the entire marketing platform.”
Foxtons offers the opportunity for Multiple Listing Service marketing of homes, and Davis said, “We will gladly co-broker.”
An estimated 10,000 home sellers have sold their homes with Foxtons, and Foxtons has exclusively-marketed over 3,000 home listings to buyers, including single-family homes, condos and co-ops.
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