Open For Inspection - Open For Theft!

Published 10 November 08 10:29 AM | Peter Mericka 

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

Some time ago I wrote a posting about thefts during property inspections, and noted that some estate agents were including clauses in their sale agreements with vendors that indemnify the estate agent against theft or damage during a property inspection. I also suggested that it is time to "take estate agents and thieves out of vendors' homes". My last posting drew attention to a pair of estate agents who advise potential purchasers to secretly invade the privacy of home-owners by "sneaking a peek" into cupboards in order to identify whether the vendor will "sell at ANY PRICE...". The material in this posting was provided by the victim of a typical open house theft, and provides harrowing details of the violation, loss, bullying, stress and indifference a theft victim can experience.

 

Open House Theft

"I had been renting the one bedroom unit for about three years.

I received a letter from the managing agent saying that the owner wanted to sell.

The estate agent insisted on having "open house" inspections, which I objected to, but I was told I had no choice.

During the week of the 2nd of April, 2007 I was called by the selling agent and told there would be an open house that weekend. I told them that was fine, as I would be away for the Easter long weekend but would tidy the house before I left.

I arrived home  on Monday afternoon and immediately noticed things were amiss. There was a book splayed open on the floor just inside my front door. Maybe the agent had bumped it off the shelf on their way out, no big deal. Also, a couple of pairs of my underpants were on the floor next to their drawer in my bedroom. Odd, but conceivable I could have left them there in my hurry to pack on Friday morning.

After that I went to put on a load of washing and found the mug of $1 coins I kept for the washing machine to be missing from the drawer in my lounge room. At this point I thought someone had been opportunistically rifling through the drawer when the agent was in the other room and pocketed my $35-odd of washing machine money...

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Filed under: Inspection, open for inspection, open house, escorted inspections, theft

Comments

# The Best Real Estate Info » Blog Archive » Open For Inspection - Open For Theft! said on November 10, 2008 12:25 PM:

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# Austin said on November 10, 2008 2:57 PM:

Hi Peter,

With respect, while this is indeed a terrible story and indicative of the problems of open house inspections, it is also one of incredible naivety - digital cameras, film camera kits, watches, passports, phone chargers?

I wouldn't leave these things alone in a locked car, let alone a house open to the public!

# Peter Mericka said on November 10, 2008 3:29 PM:

Hi Austin,

The point being made here is that no-one should be required by an estate agent to have their home "open to the public" (as you put it) as though it's a public building, and to absent themselves while the estate agent allows strangers unfettered access to everthing.

The victim in this case would not have been a victim if he had been present during the inspections, and he was right to refuse further inspections unless he could be present.  Similarly, the sneaky tactics suggested by the "Hot Property Gurus" cannot be utilised if the occupant is present.

Estate agents bring thieves into properties.  Thefts do not occur when the occupant of the home is present.

# jodi said on November 13, 2008 9:27 AM:

The last house we sold I used to have to take certain items out of the house with me each week - just because I feared having them stolen. It was just a case of having things packed constantly & ready to go in the car with us because 'mid week' short notice inspections by potential buyers who want to view the property at night, etc come up all the time.

After 20 or so inspections, it can be annoying to have to be that consistent (& OCD or whatever) & keeping the house so consistently clean, etc is a wearisome enough process - But nothing got stolen that I treasured or needed, and i actually had some peace of mind that important documents & jewellery, etc were with me (I'm sure the real estate agent was eyeing off some of my favourite shoes anyway!)

While your home is your sanctuary (hopefully), while it is for sale it is an asset & unfortunately the reality of the space you live in has to change, albeit temporarily until you can resettle.

But, during this time I also loaded a washing basket full of dirty laundry straight from the laundry into the boot, just because i didn't have time! So, consider the source....

# Peter Mericka said on November 13, 2008 9:36 AM:

Hi Jodi,

Instead of leaving the house and taking your valuables with you each time visistors came to inspect, why didn't you just stay in the house with the valuables?  If you stay with the visitors they can't steal anything, and you're on hand to answer their questions.

# jodi said on November 13, 2008 9:54 AM:

Hi Peter,

I think that is a highly valuable question, and in retrospect, I think a far more intelligent approach to selling a house if you do engage a real estate agent.

Though, I have posted a comment on a different article on this site about the serenity of having purchased an investment property minus any agents & just conveyancing solicitors on both sides.

And, it really was so much less painful than the sale we went through, but possibly just the other side of the equasion..

So, in answering the question, I would probaby not actually undertake an agent to sell a house for me again & found an interesting point in another article that you wrote regarding agents showing through buyers purely to have the 'stake' in the sale as the person who 'introduced' the buyer to the property.

Funnily enough, no agent we interviewed actually mentioned this important clause, but it does explain a few things.

# Peter Mericka said on November 13, 2008 11:17 AM:

Hi Jodi,

Yes, estate agents need to look as though they have a role, and showing visitors through the property is a rather pathetic way of being involved.  The reason they tell the occupier to get out is to avoid embarassment if the visitor decides to discuss matters with the vendor direct, leaving the estate agent looking like a useless dummy.

Estate agents don't like being correct by the owner, or having to direct a visitor's question to the owner, and they fear that the owner will wonder why they are paying the estate agent a huge commission at all.

There are other, more shady reasons why estate agents want owners out of the way when they show visitors through, and this comes from my own personal experience.  My wife and I had told the estate agent that we wanted a 4 bedroom house with a rumpus room to be used as a home office.  The agent took us to a 3 bedroom house with a swimming pool.  When I looked into the back yard I could see the owner sitting under a tree at the end of the garden, obviously ejected by the estate agent for our visit.  She couldn't hear me complain to the estate agent that the property was nothing like what we wanted and that he had wasted our time.

But this didn't matter to the estate agent, because he had clocked up one more visit and the vendor believed that he was a "hard working" estate agent.  Both the vendor and I had been ripped off by this time-wating deception.

By kicking the owner out of the property the estate agent can also say things that he would not want the owner to hear.  "If you come up a thousand I'm sure we can get the vendor to come down a few thousand", or "I know they desperate to sell, so if can at least put some form of offer we may be able to do business".

If any readers can suggest any positive reasons as to why an estate agent would want the owner out of the house when visitors come through I would love to hear from them.

# Lowcom said on November 13, 2008 11:37 AM:

Agreed

# Austin said on November 13, 2008 2:35 PM:

Hi Peter,

When does an estate agent's commission claim 'kick in'?  i.e. If I drive past a house with a 'For Sale' billboard, approach the owner directly and make the purchase, does the act of seeing the billboard constitute an act of the agent 'getting involved', or do I actually have to face-to-face with the agent before they get a slice?

# Peter Mericka said on November 13, 2008 3:23 PM:

Hi Austin,

Yes, that's right, if you become aware that the property is on the market during the currency of the estate agent's Exclusive Sale Authority, the estate agent is deemed to have "introduced" you to the property.  If the vendor tells you in the pub about the property, the estate agent is still deemed to have introduced you to it.

# Tim O'Dwyer said on November 13, 2008 4:42 PM:

On the contentious issue of an agent's "introduction", readers may like to revisit this Blog article:

One Sale - Two Commissions

# George said on November 19, 2008 1:06 PM:

Its interesting to read some very isolated cases about thefts at open homes, however in reality there must be thousands of open homes each weekend which dont have any problems, and like anything else in life prevention is always better than the remedy, would'nt you agree?

# Peter Mericka said on November 19, 2008 1:29 PM:

Hi George,

Would you apply you logic to the road toll, and conclude that it's no big deal because there are probably plenty of drunk and drug affected drivers whoi manage to make it home each day without killing anyone?

The best prevention measure against theft is to ensure that the vendor or occupier is always present during inspections.  Do you have any objection to this form of prevention George?

# Clive Bray said on November 25, 2008 8:12 PM:

Hi Peter

There is obvious some risk to theft at open homes, but is it not a necessary evil? Most people don't like making appointments to view, rather they like going to open homes. If this is the case, owners should check their insurance, expect the agent to have public liability insurance, and remove smaller valuable items from view. For larger or two storey homes, have at least two agents keeping guard.

# Peter Mericka said on November 25, 2008 8:38 PM:

Hi Clive,

You're right in describing it as an evil, but wrong in describing it as necessary.  Why is it necessary?

People actually prefer to view by appointment, when they can have the property to themselves, rather than to have to bump into competing purchasers and speak in hushed tones.  And who shows them through when a property is open for inspection.

Estate agents do not carry any form of insurance that covers a vendor for theft.

And having two estate agents on guard is simply illegal.  To be "on guard" a person must be a licensed security guard or licensed crowd controller, and wear a number.

The best way for any potential purchaser to view a property is to visit as the guest of the vendor, and be escorted through the property by the vendor.  Why would anyone want to do it any other way?

# jodi said on December 4, 2008 4:03 PM:

I've went to a 'vendor open' once for an overpriced house where they were doing everything themselves, their whole family did the tour - which was good because it was a huge house. We went along mainly just to see how it was done, we were in the market for a house at the time, but not that particular type of house. They'd made very nice flyers, the house was impressive, they were charming, but with answering questions on some possibly 'non-approved' improvements, they actually fell down a bit.

The downstairs bathroom looked great but they couldn't tell us much about it ie: who'd done it, when, etc was it approved? Also, some non - structural wall cavities had been removed to open spaces out upstairs & while you could see they were still structural, they did not look quite professional (joinery & plaster work). While that does not mean a builder hadn't done the work.....

so in not being forthcoming about a house they had raised their now teenage children in & obviously extended, improved & turned into quite a modern looking house, it did feel like just another dupe in a way when they were almost deliberately evasive about the shower, etc and then disclosed their husband's place of work & position as some kind of credential referal.

It had very little relevance to the general questions & was a pretty bad attempt at trying to 'gloss over' & get back to 'hosting' us all. The whole experience was actually pleasent & in some ways did feel like I was in a very quaint giftshop, or some acquaintance's house, moreso than an 'open.' Most people weren't asking questions, we didn't see any negotiating or deep intense discussion at all. And while I realise many agents attempt to 'create' the atmosphere of these things whether there is any real interest or not, I did walk out thinking, these people do need to establish some types of boundaries or a sense of 'business' about what they are doing to encourage interested parties to be more forthcoming, even in the presence of other potential buyers. A lot of people who had probably been to dozens of opens suddenly didn't have the same protocol to follow & were a little bemused?? But, by the same token there was no ridiculous pressure either...

I don't think these guys would have gotten their price & maybe they just wanted to test the market for free?

I don't think the house sold, so how does the average vendor secure a price they are happy with?

# Peter Mericka said on December 5, 2008 9:40 AM:

Hi Jodi,

You are right about the need for a professional negotiator to be involved in the sale of real estate, but estate agents are not, and never can be, genuine negotiators.

To find out about how true real estate negotiations should be conducted CLICK HERE.

And find out about how a property inspection should be conducted by a vendor CLICK HERE.

# Mary said on January 9, 2009 9:21 AM:

Leaving our home during 'Open for Inspections' was one the reasons for taking it off the market entirely. Years ago, when we sold our first house, we were at home during these inspections.

Second time around, I never understood why we needed to hide out in the neighbour's house, sit in a parked vehicle down the road or any of the other ludicrous things we had to do, so as to be absent from our own property.

Regardless of what the agent's say, the property is still our home until it's sold. It isn't a public building to which all and sundry have access.

Next time around, we'll be at home during an inspection, whether the agent likes it or not.

# real estate said on January 17, 2009 5:29 PM:

As a person who has run hundreds of open houses because I was basically forced to by my various bosses and also by public perception, let me tell you this...

Open homes are mostly for the psychological benefit of the vendor. The agents use it as a

"see , we're doing something for you"

technique to placate an anxious owner.

Do they work - well of course. Do they not work? - same answer...

Bottom line is they are totally unnecessary.

# Australian Real Estate Blog said on February 23, 2009 9:58 AM:

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