Sept. 27 (Bloomberg) -- Foxtons, a discount realtor that brokered home sales for a 3 percent commission, shut its U.S. 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 today 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,'' John D. Blomquist, the company's senior vice president and general counsel, said in the statement.

U.S. home prices will fall 2 percent to 4 percent this year and ``more next year,'' Fannie Mae Chief Executive Officer Daniel Mudd said today. The National Association of Realtors forecasts the first national decline in the U.S. median price since the Great Depression.

Existing home sales will fall 8.6 percent in 2007, according to the Chicago-based Realtors group, which represents 1.3 million real estate agents. The predicted drop exceeds the 6.8 percent estimated by the group a month ago. The trade association has lowered its forecast nine times this year.

Lower Commission

Foxtons paid real estate agents a salary and a 3 percent commission rather than the traditional 6 percent, 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,'' said Kathy Platt, a real estate agent in Bergen County, New Jersey. ``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 U.K. firm BC Partners Ltd. Foxtons' U.K. founder Jon Hunt retained the U.S. branches as part of the transaction.

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

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

`Very Concerned'

Its U.S. operations lost 7.96 million pounds ($16.1 million) in 2005, compared with an 11.85 million-pound pretax profit in the U.K., according to the latest annual report filed at U.K. business registry Companies House.

The company has 4,400 homes listed for sale in the U.S. and said it plans to use the revenue from those deals to pay creditors. 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,'' said Richard Lovell, an attorney in the Queens borough of New York City who represented sellers listing property with Foxtons. ``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 today by the Asbury Park Press.

To contact the reporter on this story: Sharon L. Crenson in New York at screnson@bloomberg.net

Last Updated: September 27, 2007 18:16 EDT