Open For Inspection? Open For Exploitation!

Published 05 November 08 05:07 AM | Peter Mericka 

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, 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.

More about "Open For Inspection - Open For Exploitation"...

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Filed under: open for inspection, open house, buyer advocate, hot property gurus, hot property specialists, buyers agent

Comments

# Sick said on November 5, 2008 9:49 AM:

I felt terrible and sick when I discovered somebody was perving in my bedside draws when the agent brought them and the agent reckons it is OK if people need to try doors and draws to see if they work but they should not put their grubby hands in there or move stuff.

# Peter Mericka said on November 5, 2008 10:54 AM:

The time is 10.47 am on Wednesday 5 November, 2008.

I have just gone through the process of downloading the gurus' document "Discover the top 10 things Real Estate Agents won't tell you!", and I have discovered that the gurus have changed it.

Instead of deleting their outrageous advice on how to exploit vendors who are in distress, they have simply added a sprinkle of synthetic ethics by deleting reference to "sneaking a peek" and stating:

"At no time do we condone unethical behaviour, so please respect the privacy of the vendor.  Seek permission from the seller or the sellers agent before opening cupboards, wardrobes etc."

To see the amended version of the document CLICK HERE. 

I wonder, what would the vendor say in response to this question from a purchaser, "Excuse me, I want to check your cupboards, drawers and garbage bin for clues about your personal situation, is that OK with you?"

If one of the property gurus is the vendor, or is representing the vendor I am sure they would say, "Sure, go right ahead".

No-one can render the term "ethical" an oxymoron like the Hot Property Gurus!

# Nancy Riddell said on November 5, 2008 4:18 PM:

Hi Peter,

Ive just read their report "Discover the top ten things Real Estate Agents won't tell you" and I found it a great source of information!

Ive also registered to receive their ongoing hints and tips - their should be more information like this available.

I want the Hot Property Specialists on my side when I buy my next investment property.....

Nancy

# Peter Mericka said on November 5, 2008 4:24 PM:

Hi Nancy,

Do you have any concerns about the ethics of the Hot Property Specialists?

Would you expect them to use unethical strategies on your behalf when you buy your next investment property?

And when you come to sell your next investment property, would you have any concerns if they were to tell a prospective purchaser that you're selling because of personal problems - or would that be going too far?

# Nancy Riddell said on November 5, 2008 6:39 PM:

Hi Peter,

Ive read the 'Hot Property Specialists' website and report from cover to cover - I don't understand what all the fuss is about!

I see nothing unethical, dishonest or offensive in their information.

If I am selling my home or investment property I would expect that potential buyers would look in my pantry, bathroom vanity or walk-in wardrobe as these items are sold as part of the property.

In turn, if I was purchasing a property, I would have no hesitation to, for example - look in the bathroom cupboards or under the kitchen sink for water damage! At the same time, in passing, you would notice what is contained within.

It is apparent that you have taken the information from Hot Property Specialists and blown it out of all proportion. I have also spoken to my work colleagues (whom some are also property investors) and they too loved their information and have also registered to receive the 'gurus' ongoing hints and tips.

We wish to thankyou for alerting us all to the gurus at Hot Property Specialists. These sorts of blogs are great sources of information.

# Austin said on November 5, 2008 7:56 PM:

Hi Peter,

Respectfully, while going through garbage bins, bills, etc. is obviously not related to an actual 'home' inspection and therefore grossly unecessary, does opening a cupboard draw a line?

Often during inspections I will open a cupboard door, not to sneak, per se, but legitimately inspect a cupboard!

With all due respect, when a seller opens their home for inspection, don't they have the opportunity and time to remove anything valuable, objectionable from the house?

# Tim O'Dwyer said on November 6, 2008 9:24 AM:

What's good for the goose is good for the gander. Whenever I give general advice to DIY sellers, I emphasise that prospective buyers must be accompanied at all times during inspections. If my clients are single ladies I suggest strongly that, as a matter of caution and safety, they should not disclose that they live alone. Also I suggest that they ensure there are a number of male "props" (such as clothing, toiletries, books, magazines etc) around the house during inspections. Finally I emphasise the importance of having a male friend or family member present whenever buyers are making their inspections.

# Peter Mericka said on November 6, 2008 9:36 AM:

Hi Nancy,

The ethical issue that arises here is one of a purported "specialist" advising consumers that it's legitimate to use a property inspection to discover personal information about the vendor that the vendor would not readily divulge.

As I asked you in my previous comment, would you have any concerns if visitors inspected your home in order to find out about your personal circumstances?  I am sure that you would.

Perhaps there's one rule for you as an investment purchaser, but another for you as a home-owner vendor.

# Peter Mericka said on November 6, 2008 9:44 AM:

Hi Austin,

It's all in the mind.  A person who uses an "open house" to look for things to steal is not welcome and is not entitled enter the property, let alone to open cupboards.  However, a potential purchaser who opens a cupboard does nothing wrong by doing so.

A person who seeks to gather personal information about the vendor in order to use that to their advantage, and does so secretly (because they know the vendor would object) is being dishonest and their actions are illegal.

So, to re-emphasise my point, opening a cupboard to inspect the cupboard is fine, but opening a cupboard to sneakily gather personal information about the home-owner is wrong, very very wrong.

# Austin said on November 6, 2008 10:18 AM:

Hi Peter,

I guess if it is in the mind it makes it hard to prove intent (except something like going through bins).

Turning things around the other way; hypothetically, let's pretend I was a seller and my house had an obvious wood damage problem located at the rear of a cupboard or garage wall.

Tactically, could I cram the occupying space of the garage / cupboard with 'personals' in order to obstruct a legitimate buyer from looking where I don't want them to? There would be nothing illegal in doing so from the seller's point of view (except maybe financial advantage by deception? Or is it just another case of buyer beware) - and from what is mentioned here, the legal burden is more on the potential purchaser to make sure their 'mind' is right!

To be honest I wouldn't be surprised if such a scenario has been put forward by an agent in the past!

Regards,

Austin

# Peter Mericka said on November 6, 2008 10:31 AM:

Hi Austin,

Let's just focus on the word "sneak" which is what attracted my attention to the Hot Property Gurus.

According to the Oxford Dictionary, the term sneak includes "...one who steal without breaking in, using open doors or windows...".

Being "sneaky" involves some form of dishonesty.  Whether it is the vendor who is being sneaky or it is the purchaser who is being sneaky really doesn't matter.  The issue is that there is no place for sneaks or sneaky behaviour in real estate transactions.

When the Hot Property Gurus advised consumers that it's acceptable to be sneaky they did themselves, the industry and all otherwise decent consumers a terrible disservice.

# Peter Mericka said on November 6, 2008 10:37 AM:

Hi Sara Hastings home owner and investor,

Your comments have been moderated as the content suggests to me that you are not bona fide.

Please contact me by telephone on (03) 9726 2702 or by email to confirm that you are genuine.

# Keith said on November 6, 2008 10:43 AM:

Hi all,

The last comment has compelled me to post this, as Hot Property Specialists have reworded the tip you are all talking about and it is only one word in the whole document then what is the problem, I am sure that not everyone writes with a dictionary beside them.

# Keith said on November 6, 2008 11:13 AM:

I would like to ask does all posting go up and as long as they do not contain foul language of course. As it would appear from the comment above that some people’s posting are not placed up. Could one not blank out the naught word or remove it if that was the case…………………. I am puzzled by this

# Peter Mericka said on November 6, 2008 11:18 AM:

Hi Keith,

I have no doubt that the Hot Property Specialists believed that their advice to "take a sneak peek" was acceptable.  Only now have they realised how wicked this advice was.

The purpose of my attacking them was to draw attention to the fact that naive people can hold themselves our as experts and offer outragous advice to ordinary consumers.

I accept that some people will rub their hands together with glee, and act on the gurus' advice on how to screw the vendor by gathering personal information, but anyone who can empathise with a vendor or tenant would be outraged.

# Anne said on November 6, 2008 11:48 AM:

Its about time someone took the side of buyers! For too long buyers have been subject to unethical behaviour from Selling Agents telling them untruths about properties or conveniently forgetting important facts - remember the agent that forgot to tell buyers about a MURDER in the house?  But somehow we all seem to accept this from selling agents - and even EXPECT it!  Why are we now getting upset about a couple of ladies getting on the buyer's side and getting them to open their eyes? If vendors don't take the care to conceal obvious signs of a distressed sale, they shouldn't complain about buyers noticing. By the way, I didn't notice the "gurus" suggesting theft or messing with people's property, so why has this been brought up? Just for sensationalism I expect...

# Peter Mericka said on November 6, 2008 11:52 AM:

Hi Keith,

All comments go up unless they contain personal attacks on me (in which case I am entitled to know the ID of the person posting them), or they contain offensive language, or they are not bona fide.

Comments in the latter category are easy to identify because they usually include links to other websites or they contain advertising masked as comment.

# Peter Mericka said on November 6, 2008 12:02 PM:

Hi Anne,

Are you suggesting that purchasers fight fire with fire - that if vendors (or the estate agents they engage) behave unethcially against purchasers, then it's appropriate for purchasers to hire the same type of estate agent to use unethical tactcs against vendors?

The Hot Property Gurus have gone beyond drawing attention to the fact that some people sell because they are in distress.  They have actually advised consumers that it's OK to use "sneaky" tactics to discover things that the vendor did not intend to disclose, and to do this under the guise of a harmless property inspection.

The reference to theft was an indication that once the mindset of the "sneak" is established, and the "theft" of information is regarded as acceptable, the theft of tangibles is just a short step further.

# Anne said on November 6, 2008 12:15 PM:

Hi Peter

Don't put words in my mouth. Buyers are far too often taken advantage of in the purchase process - they NEED to open their eyes. Seems to me you are also putting words in the "gurus" mouths - inferring a myriad of meanings from the word "sneak" and drawing your own conclusions. Time to get on the side of consumers, and stop making buyers feel that they're doing something wrong ("very, very wrong") if they gather information before signing a contract. Buyers need to beware, carry out their due diligence and purchase astutely.

# Peter Mericka said on November 6, 2008 12:21 PM:

Hi Anne,

I agree with you that "Buyers need to beware, carry out their due diligence and purchase astutely."

However, I would add the word "honestly" to that.

# Keith said on November 6, 2008 1:37 PM:

your comment have puzzle me more then even now, so its ok for you to attack them but if anyone does the same to you, you will not place it up. that appears very one sided.

Anne, I would have to agree with you.

I had never heard about Buyers Agents before this but I may just have to look into how they may be able to help me in the next couple of months.

# Peter Mericka said on November 6, 2008 1:56 PM:

Hi Keith,

Personal attacks on me are not published unless the attacker is prepared to identify themselves.  I cannot defend myself against anonymous detractors - I'm prepared to take flak, but I won't take it from cowards who refuse to identify themselves.

Keith and Anne, I must ask both of you this question:  Do you see any ethical flaws at all in the methods suggested by the "gurus"?

# Austin said on November 6, 2008 2:04 PM:

Hi Peter,

I kind of agree with some of the postings here - you advise yourself that as a buyer it's not what IS in the section 32 but what ISN'T that counts, for example - the buyer needs to be aware.

It strikes me that since the agent is representing the vendor, not the purchaser, that they would side with them in the possible obstruction of potentially deal-breaking flaws with a house.

Sure, the buyer should buy honestly, but the seller should sell honestly too, and buyers should be aware whose side the real estate agent is on.

Regards,

Austin

# Peter Mericka said on November 6, 2008 2:15 PM:

Hi Austin,

As a lawyer, I too am a buyer's advocate.  The point I am trying to get across is that a buyer's advocate should not act dishonestly, nor should they advise their clients to act dishonestly.

I am finding it very interesting that some of the comments on this posting seem to suggest that consumers are sick of dishonest estate agents working against them for vendors, and now they want their own unscrupulous estate agents - to fight fire with fire, so to speak.

# Austin said on November 6, 2008 2:29 PM:

Hi Peter,

With all due respect, who is going to stop the dishonest agents? The REIV?

# Peter Mericka said on November 6, 2008 2:39 PM:

Hi Austin,

Also with respect, what I'm hearing here is that one does not go to the police for justice, one goes to the Godfather (recall the scene where the undertaker asks Don Corleone to "represent" him in his dealings with the fellows who raped his daughter).

# Nancy Riddell said on November 6, 2008 2:46 PM:

So Peter - Let me get this straight.....You work as a buyers advocate, a lawyer, and judging from your website you take on the role of a 'selling agent' aswell as the conveyancing?????????

Is that not a little unethical?

# keith said on November 6, 2008 2:50 PM:

talking about the god father

o my god what has that to do with buying property?

# Peter Mericka said on November 6, 2008 3:02 PM:

Hi Keith,

Sorry, but if you don't get the analogy I really can't assist you.

# Peter Mericka said on November 6, 2008 3:04 PM:

Hi Nancy,

Explain to me how you see it as "unethical" and I'll do my best to address your concerns.  Let me assure you though, I don't assume all roles in one transaction.

# Dan said on November 6, 2008 3:08 PM:

I work in IT and I can tell you know that the amount of hit that the Hot Property Specialists would have recieved becuase of this Blog and the fact that it all over 2 very small words out of 200 which from reading this site and by your own admissions they have corrected these words................I can tell you now without hesitation their web site will have more hits which will improve their Google ranking and this would normally cost them a lot of money.

From what most people are expressing and the amount of (357) visits but only 26 comments from a hand full of people this would tell me that approx 300 people who have visits this site will have clicked on to their site………………….. any business would love that amount of hit over a day.

and this is based on IT info.

# Peter Mericka said on November 6, 2008 3:36 PM:

Hi Dan,

I think you've answered the question as to why there are so many estate agents etc. out there doing dodgy things - they're all clamouring to be "blogged" in order to boost their Google rankings!

# Peter Mericka said on November 6, 2008 3:40 PM:

Hi Nancy,

If you're really interested in a detailed explanation of my business and how we operate please telephone me on (03) 9726 2702 or email me.

Do you have any further comments to make about the current posting?

# Austin said on November 6, 2008 4:24 PM:

Hi Peter,

I wouldn't suggest a buyer 'fight fire with fire', so to speak, but it's worth bearing in mind that when it comes to buying a property the buyer can only rely on themselves.

As I mentioned above, there could be situations where the agent, in tow with the seller, deliberately obstruct parts of a property from potential buyers in order to keep the 'glossy' image.

I doubt the Hot Property people would be wilfully encouraging criminal activity.

Regards,

Austin

# Peter Mericka said on November 6, 2008 8:20 PM:

Hi Austin,

I think the general theme here is that ethics is important to a purchaser when they're being hard done by, but it's an "all's fair in love, war and real estate" if unethical behaviour favours the purchaser.

I agree with you that the Hot Property Gurus would not wilfully encourage criminal activity.  I believe that the problem is one of naivete and ignorance, and these are what perpetuates improper behaviour in the real estate industry.

# Peter Mericka said on November 7, 2008 10:34 AM:

A note to the 8 "former clients" of Hot Property Gurus who happen to have stumbled across this blog posting and wish to provide effusive testimonials for them, please email me instead as one could come to the conclusion that you're stooges attempting to hijack the discussion.

As I have mentioned before, I often see false anonymous comments posted by those whose behaviour is under discussion - they are quite easy to identify.

# Nicole Marsh said on November 11, 2008 10:59 AM:

Did you ever consider they could be actual clients who we have told to look at your site for a laugh at you?

Peter we are not even going to spend the time nor the money on a solicitor to defend us. Obviously your law and real estate businesses are very busy! - if you've got nothing better to do with you time than worry about us.

Thanks for the free publicity

# Peter Mericka said on November 11, 2008 12:38 PM:

Hi Nicole,

I find your arrogance and dishonesty astounding.  I have no doubt that had I not taken you to task on this issue you would still be convincing ordinary consumers that being sneaky and underhanded is acceptable in real estate.

You're a disgrace to the industry.

# Austin said on November 11, 2008 2:01 PM:

Nice rebuttal, Nicole - God almighty, what slime. From what I hear Queensland is like a scumbag magnet at the moment.

If anything, I doubt their 'advice' would amount to anything more than a sack of crap. Even IF, for example, you were able to get 'inside info' like they suggest, the selling price is still (luckily) determined by market forces i.e. the highest amount any of the potential buyers are likely to pay.

Can't wait for their next piece - "Once the sneaking is done, it's time for the bullying and coersion! All legal, of course!"

# Peter Mericka said on November 11, 2008 2:30 PM:

Hi Austin,

I think the real tragedy is the apparent belief among purchasers that the industry is so corrupt that things have to be "evened up" by the likes of the Nicole Marsh and Liz Wilcox.

As I pointed out in my "Godfather" analogy above, when ordinary people come to believe that the forces of corruption and dishonesty are too great to resist, they seek to employ corrupt and dishonest means themsevles.

In my view Nicole and Liz, and those like them in the industry become catalysts for, and perpetuators of, corruption.

# Austin said on November 11, 2008 2:52 PM:

Hi Peter,

I do agree with you, however, I also agree with the concept of a 'buyer's agent', who would be entitled to a commission on purchase of a property, since, as I mention above, it is a bit one-sided at the moment; the agent acts on the behalf of the seller, so a buyer's agent would seem a fair and logical step.

Though, carrying this further, why have both when you don't *really* need either!

Regards,

Austin

# Peter Mericka said on November 11, 2008 3:10 PM:

Hi Austin,

The reality is that the lawyer is the true "buyer's advocate", and this concept has to be separated from that of the "buyer's agent".

The "buyer's agent" is an American concept, whereby the estate agent represents the purchaser by looking for a property according to the purchaser's specifications.  American estate agents have been able to monopolise information to such an extent that in many cases a purchaser cannot buy a property other than through a "buyer's agent".  The buyer's agent usually gets a 3% commission, and the vendor's agent gets 3% commission, and it is the vendor who pays the full 6%.  As you can imagine, a "no sale" is not a good situation for either agent, and so there is every likelihood of collusion.

Some Australian estate agents have tried to clone this concept here, but it only really works for high-end real estate where the purchasers have more money than time.

The "buyer's advocate", on the other hand is simply fraudulent.  No estate agent has the capacity to draft a contract for a purchaser, or to draft terms and conditions to suite a purchaser client - so how does a buyer's advocate justify their fee (invariably a percentage of the sale price).

Then there's the incentive paradox.  If a buyer's agent is being paid to procure the property at the lowest price, shouldn't the buyer's agent's fee be on the basis of higher fee for lower price?  On the other hand, if the incentive to collude with the vendor's estate agent for a higher price is not really there, how does the vendor's estate agent argue that commission provides incentive?

But the real reason why buyer's advocate estate agents now exist is that property lawyers and conveyancers are too damned lazy to provide proper advocacy services.  Just try ringing around lawyers and conveyacers for conveyancing services, and see how many will require you to have "signed up" with the estate agent first, so that they are responsible for no more than the clerical tasks associated with the conveyancing transactions.  I call such lawyers and conveyancers CLOWNS - Conveyancers and Lawyers Offering Worthless and Negligent Services.

So, corruption of the real estate industry is a group effort, with estate agents pretending to be advocates, lawyers avoiding the role of advocate, and consumers not knowing which way to turn.

# Dave said on November 24, 2008 5:48 PM:

It really seems like these comments have been hijacked by pro Hot Property Sneakers supporters

(or the same 2 people commenting under aliases).

Nice response Nicole, way to continue to show your true colors.

Thank you Peter for calling these people out on their unethical practices and flogging a 9 page PDF to grow their email list of like minded people...