Open For Inspection? Open For Exploitation!

OPINION
by Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd

A vendor should always be present during house inspections. Whenever an estate agent shows a prospective purchaser through the property, and particularly when the property is "open for inspection", the vendor should always be on hand to protect not only personal property, but also personal privacy. This was made quite clear recently when two estate agents, both accredited as Buyers Agents, advised purchasers on "sneaky" tactics for gathering intelligence about the vendor during inspections.

Why Escorted Inspections Are Dangerous

The problems associated with "escorted inspections" are not new, and consumers regularly complain about thefts, snooping trauma and various other problems associated with estate agent controlled inspections.

The problem has been further compounded by a couple of estate agents who, having previously conducted property inspections on behalf of vendors, decided to "change sides" and use their estate agent expertise to advise potential purchasers on how to "sneak a peek" into cupboards and other private areas of a vendor's home in order to find out whether the vendor is in distress and in need of a quick, cheap sale.

The "Hot Property Gurus"

Nicole Marsh and Liz Wilcox call themselves the "Hot Property Gurus". According to their website www.HotPropertySpecialists.com.au, both are registered as "Buyers Agents" with the Queensland Office of Fair Trading.

"Both Liz and Nicole identified the need to arm buyers with the right information and expert knowledge - therefore empowering them in the whole purchasing process to make the 'right decision' and on their own terms in a system that traditionally favoured sellers, not buyers."

In order to demonstrate their inside knowledge of the industry, these "gurus" offer to potential investors, owner occupiers and first home buyers an "informative report" in which "our Property Gurus answer your burning real estate questions and shed some light on the industry's secrets."

The "gurus" also inform consumers, "These simple tips could save you thousands of dollars and a lot of heartache...Get the knowledge to make a well informed decision now, and purchase property on your terms not the sellers, at the best possible price."

What is not said is that one of these "simple tips" includes material that could be described as dishonest and exploitative espionage. What I am referring to is a tip titled "The owners' real circumstances as to why they want to sell", which reads as follows:

"The owners may be a lot more desperate to sell than the agent may tell you. Is it a divorce or relationship breakup? Or have they had a work transfer? Do a bit of detective work during the inspection...

Here are some clues to look for - is there only women's clothes in the cupboards? Maybe the husband has moved out and they will sell at ANY PRICE to dissolve the relationship and part ways! Also, take a sneak peak (sic) in the kitchen cupboards, is there any food there? Maybe they've both moved out and left the furniture in the house to aid the sale. Sometimes it can be more about what's not said, than what is."

FOR A FULL COPY OF THE GURUS' REPORT - CLICK HERE

An Analysis Of The Gurus' Advice

It is a fact that many home-owners sell real estate because of some form of distress. But is it really fair for a potential purchaser to take advantage during the property inspection, without regard for the owner's right to privacy? The call to "Do a bit of detective work during the inspection" certainly suggests that the purchaser should ignore the home-owner's right to privacy all together.

As a former detective with the Victoria Police Force, I can assure the "gurus" that what they suggest is NOT detective work. It is against the law for a detective to "take a sneak peek" anywhere in another person's home. A detective must be able to convince a court that the invasion of the property-owner's privacy is so necessary that the court should issue a search warrant.

As a lawyer, I can also advise the "gurus" that their advice could well turn a property visitor into a trespasser. This is because the implied consent that allows a visitor to wander into the rooms of a house does not apply where the person enters the house, or part of the house, with an intention to invade the privacy of the occupant. I will not go into the accompanying likelihood that a person who has the mindset of a "sneak" may also develop the mindset of the opportunistic thief, other than to say that a person who enters a house, or section of a house with the intention of stealing also commits the criminal offence of burglary, whether they steal anything or not. When a person is encouraged to break one law, other laws are easily disregarded or ignored.

In my own capacity as a home-owner I find the "gurus'" advice on "clues to look for" utterly disgusting and highly embarrassing. What home-owner would not feel violated if they knew that a stranger was looking for "clues" of the nature suggested by the "gurus"? The "gurus" offer the following "clues" as examples of what a potential purchaser should look for:

• Is there only women's clothes in the cupboards? Maybe the husband has moved out and they will sell at ANY PRICE to dissolve the relationship and part ways!
• Also, take a sneak peak (sic) in the kitchen cupboards, is there any food there? Maybe they've both moved out and left the furniture in the house to aid the sale.

The places for sneak peeking are almost unlimited, and have the potential to deliver up all kinds of useful intelligence. For example, perhaps the "gurus" would like to add these to their list:

• Sneak a peek into the bedside drawers or medicine cabinet for medication that may give some insight into the health of the home-owner. Chemotherapy medication may indicate that the home-owner is in severe distress and unable to negotiate effectively.
• The bathroom cupboard may also reveal treatments that will give an insight into the health or lifestyle of the home-owner.
• Sneak a peek into filing cabinets. Overdue bills or letters of demand may indicate financial stress and a need to sell quickly for whatever the home-owner can get.
• Check the refrigerator for documents or notes held by fridge magnets, which may contain information of value (look on top of the fridge as well). Small items of information such as confirmation of travel plans, accommodation arrangements, family disputes etc. can help you to piece together your profile of the home-owner.
• Sneak a peek into the home-owner's garbage bins, as these often contain a wealth of personal information about the occupants of the property. Things to look for include medicine packaging, indications of special dietary needs, letters and other documents that may provide vital information about the home-owner.

From the "Dark Side" to the "Darker Side"?

It is interesting to note that the role of the vendor's estate agent is described by the "gurus" on their website as the "Dark Side":

"Prior to working as a ‘Buyers Agent,’ Liz worked for the ‘dark side’ (as she calls it…) as a selling agent. This is where she saw firsthand that buyers needed someone on their side, to look after them and protect them. Liz loves what she does and helping people achieve their goals. She has no plans at all to go back to the ‘Dark Side’."

I can only conclude that there must be a total absence of ethical light on the "dark side".

Some Questions For the Gurus

It seems to me that the "gurus" have probably developed their sneaky strategies as a result of their own experiences as estate agents, or buyer's agents. This prompted me to ask them a few questions:

1. Is it fair to assume that you personally use the sneaky tactics you are advising others to use?
2. To your knowledge, do most so-called estate agent "buyer's agents" use these sneaky tactics?
3. How do you ensure that you will not be discovered when you "sneak a peek"?
4. Have you ever been caught when "sneaking a peek"?
5. If you have been caught "sneaking a peek", did you feel guilty or dishonest or ashamed about having done it?
6. Have you ever caught visitors "sneaking a peek" during inspections you were conducting for vendors, and if so, did you just accept it as normal?
7. If you caught someone "sneaking a peek" during an inspection of your own home would you feel violated?

Conclusion

As discussed the article "Escorted Inspections", theft is a major problem in estate agent controlled inspections. Opportunistic theft can take place whenever a person is given the opportunity to discover something that has been left unguarded, whether it is a tangible object or the unauthorised obtaining of information.

The "gurus" are obviously aware that there is ample opportunity for a visitor to surruptitiously gain access to parts of the property that are off-limits to visitors, and that it is quite common, even normal, for visitors to exploit this. The following safety tips will ensure that the property and privacy of owner-occupiers and tenants is protected during property inspections:

• Property inspections should be conducted by the property owner personally. There is no need for an estate agent to be present when a potential purchaser inspects a property. Estate agents conduct property inspections simply to be in a position to prove that the visitor was "introduced" to the property in accordance with the estate agent's Exclusive Sale Authority.
• If an estate agent is to escort a potential purchaser to the property, the property owner should ALWAYS be present. When the person visiting the house knows that the owner of the house is present, there is a natural respect that comes with being the owner's guest. Visitors always seem to be "on their best behaviour", and they like to have the owner nearby as they look through the house.
• The property owner should accompany each visitor into each and every room. Not only does this prevent sneaky breaches of privacy, and petty theft, it also allows the visitor to feel comfortable in the knowledge that no allegations can be made if something is later found to be missing or interfered with. In addition, the visitor has immediate access to the vendor, the true expert on the property, to ask questions about the property.
• Visitors to a property should never enter rooms on their own, or open cupboards or drawers without permission. Common sense is the best guide for visitor conduct in a vendor's home. Ask yourself, "Would I do this if the vendor were standing here watching me?" If what you are doing can be described as "sneaky", then it is probably dishonest and highly illegal.
  

I wrote to the "gurus" to express my disgust:

"...I note that both of you proudly state after your names “Registered Buyers Agent with the Queensland Office of Fair Trading”.  Do you not feel that there is something amiss when a person who is registered with the “Office of Fair Trading” behaves in a manner as unfair as you do?

I conclude by condemning you both as representing the worst elements of dishonesty and cynicism currently operating in the Australian real estate industry, and I seek your written explanation for your behaviour."

I have received no written explanation from the "gurus".

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