Davis gets all shook up at discount upstart.

For Van Davis, the current president and chief executive officer of Foxtons North America, Foxtons wasn't love at first sight.

When he interviewed with the company, several years ago, he thought that Foxtons didn't have what it takes to succeed in residential real estate. The company was intent on charging low commissions--2% of a sales price as opposed to the traditional 6%--but its low fees went along with low quality of service.

"Foxtons was advertising and I'd heard of them and the offer was just interesting enough that I figured I should look at them," Davis recalls.

"When I looked at the opportunity, I really was not interested. Foxtons' previous model, the 2% model, was not working. We were a limited service broker at 2%--we would give you a little print exposure, a little Internet exposure, but you would show your house yourself, you would close your own deal. Even when we ended up selling the property, people were unhappy with the experience. They wanted less commissions, but full service, and we weren't giving them that."

However, Davis was intrigued enough by Foxtons' model to research it a little further. He visited the company's United Kingdom operations and was pleasantly surprised by what he found.

Across the pond, Foxtons' commissions were a little higher, but they allowed the company to create its own niche.

"The UK market is very different, but we looked at it and we knew that we could take about 3/4 of it," Davis explains.

"When I joined Foxtons in late June of last year, I knew that things had to change. Americans are very busy and they want someone to take the stress off. So we did extensive analysis and determined that at 3% commission rate we could offer full service, but would still be very specialized."

As part of Davis' long-term business plan, Foxtons started advertising on billboards and on the radio, the company has launched a glossy new magazine, with photographs for all of its listed properties, and Foxtons recruiters are now interviewing about 50 prospective employees a week.

Unlike most people who work at residential real estate firms, Foxtons employees get a regular salary of $25,000 in addition to their commissions, as well as health care benefits and company-provided car and cell phone. They also specialize in one part of the business--they can be a broker, a listing agent or even a building photographer, but Davis does not want them doing everything at once, the way brokers at other firms often do.

"Because our agents are our employees, we can control them. The consistency is the critical element," he explains.

"The average real estate agent in America last year did seven transactions and made just over $30,000. Our agents will make almost $100,00 and they will do it in an area they are good at. They can make more money, be better at what they do and be with a company that's cutting edge."

And Davis, who previously served as chief executive officer of Century 21, knows what he is talking about. He has been around residential brokers since childhood--his mom worked for Century 21 in Maine--and has 20 years of business experience behind him.

According to Davis, though he was always interested in real estate and even minored in it in college, he didn't think about becoming a broker until the age of 27.

By then, he was working as a business analyst with an engineering firm that built weapons systems for the United States government. He didn't particularly like his job--"they were not really profitable and they didn't value anyone, but engineers," he says,--but he was already married with children and felt it would be irresponsible to start switching careers.

"And then a co-worker came to me in March of 1985 and he showed me a sore on his tongue; it ended up being cancer," Davis recalls. "He was 27 and I was 27. And I thought 'Life is too short to be doing something you hate.'"

He called his mom from Montreal, where he was then located, and asked her for help. As luck would have it, an acquaintance of hers was selling a Century 21 sales office in Northern Maine.

"I ended up moving and buying the office with the top-producing broker," Davis says. "I stayed there for 10 years, but got bored with it--it's a very rural, economically depressed area and I wanted more. So I sold the company to my partner."

As Davis was in the middle of putting his life in order--over the years he had acquired various properties in the region and had to sell them before moving out of state--he received a phone call from a Century 21 broker in Boston, offering him a job.

"Ten months later, Cendant bought Century 21. They closed down all regional offices and fired about 1,200 employees," Davis recalls. "They also moved the headquarters to New Jersey and were looking for a director of business and finance. I got the job."

Davis, who was born in New Jersey but moved to Maine when he was about 10 years old, thrived in his new job. He eventually became the company's chief executive officer, taking a very hands-on approach to business.

"I used to say to my staff 'You can't hide from me, I used to do your job,'" he says. "I just worked my way up."

But now that he is hiring new people for Foxtons, Davis expresses a certain ambivalence about extensive real estate experience.

He prefers that Foxtons employees learn their new trade at Foxtons, without bringing in any bad habits from previous workplaces.

"The general profile we look for is three to five years of sales experience, integrity, hunger for success and a strong work ethic," he says.

"We prefer that it's not real estate sales experience. Our model is so different that it does not add much value to us."