Estate Agents Should NEVER Conduct Inspections

Published 23 February 09 09:53 AM | Peter Mericka

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

When unknown visitors rummage through children's clothes during a property inspection it can give rise to all sorts of fears and concerns. It is now well known that theft and "snooping trauma" are common occurrences during real estate inspections conducted by real estate agents. Real estate vendors are advised that they should never allow a real estate agent to conduct property inspections. The only person qualified to protect valuables, privacy and safety during a property inspection is the vendor.

We regularly receive reports of theft and snooping during real estate inspections, and the following is just one more:

"We had heard the horror stories about valuables being stolen during open for inspections, breaks ins etc. so we did our best to minimize the risk by hiding our valuables away and taking all keys with us during our open for inspections. What we hadn't anticipated was that it would be our real estate agent who would expose our family to a higher risk.

At the beginning of our contract we specified that photo id must be provided for all people who came to open for inspections. However, one of the representatives from our agency not only managed to advertise the wrong time on the internet not once but two weekends in a row without notifying us. Because the agent and those people that saw our house on the internet (the only place the house was advertised at the time) turned up one hour early, when our family was swimming in the pool, we knew that 9 groups of people (mostly groups of 2-3) had attended that day.

At the end of the open for inspection, the agent showed us a loose piece of paper (not even the proper record) with just 5 names on it. When we queried this, we were told it was "a new strategy". The agent let around 20 people into our house and only asked them on the way OUT if they were interested, if they said yes, he would take their name and contact number. So the other 15 of so people who went through our home, searched through our children's wardrobes etc.. we have no idea who there were.

This is only one of our shocking experiences with this very prominent agent. Do we have any recourse?"

Comments

# Denise said on February 23, 2009 1:28 PM:

I have never heard of vendors being able to conduct the open for inspections but we tried to protect ourselves by insisting the agent request photo ID. The agent clearly didn't - I believe the agent has broken their duty of care at the very least. But what I really want to know is do we have any recourse? Or is this now standard practice by this particular real estate agent?

# Peter Mericka said on February 23, 2009 2:10 PM:

Hi Denise,

Unfortunately I had to edit your posting to replace the real estate agency's name with "this particular real estate agent" for defamation reasons.

If you can tell me which which branch of the agency conducted your open house I can contact them for an explanation, and publish their details and their responses on this blog.

I think the most disturbing aspect of your experience is that fact "persons unknown" have had access to your child's wardrobe, and it is clear that this has had an impact on you.

# Peter Mericka said on February 23, 2009 2:17 PM:

Hi Denise,

To answer your questions about vendors being able to conduct open for inspections, the only reason real estate agents conduct inspections is to keep control over the vendor and potential purchasers.

Having an estate agent conduct property inspections is counter-productive for a number of reasons. Here a just a few:

The estate agent can never know as much as the vendor when it comes to answering purchasers' questions;
The estate agent is just one more person to co-ordinate when arranging inspection times;
The estate agent cannot and will not accept responsibility for people he or she brings into the home;
Estate agents do not have insurance to cover you against theft or damage to property;
Estate agents will not "dob in" a visitor they have brought to the property because it's a reflection on them;
Estate agents tend to protect thieves by denying that a visitor they brought into the house could have stolen anything.

Why do real estate agents demand to control inspections? There are strong reasons for the estate agent conducting inspections:

The estate agent needs to prove that he or she "introduced" the purchaser to the property, in order to claim a commission if that person buys;
The estate agent wants to be able to take visitors to more than one property (this is to demonstrate to frustrated vendors that the estate agent is actually getting visitors to the property - also known as the "impressions parade");
The estate agent wants to be able to tell the purchaser intimate details about the vendor without the vendor present: "They're going through a divorce settlement and they're desperate to sell";
The estate agent doesn't want the vendor to look as though she knows more than the estate agent does, the purchaser may ignore the estate agent and start talking to the vendor;

and the list gets worse as it goes on.

See "Warning On Estate Agent Property Inspections" for more information on this.

# Tim O'Dwyer said on February 23, 2009 2:27 PM:

Peter, would you please ask Denise to phone me at 07-32081488. I'd like to discuss this issue and her experiences with her privately, but with a view to achieving some redress for her and other sellers.

# Denise said on February 23, 2009 2:52 PM:

Hi Peter,

Sorry only named them because I wasn't sure if that was standard practice for that agency. At this stage, really just want to know if they have broken any sort of law or duty of care. They obviously didn't act in our best interests or in accordance with our instructions and we terminated the contract. (this was just one of the reasons). Our property didn't sell and waiting for their advertising bill but will be asking them to review the bill, taking into account their many errors over the 5 month contract (another blog in itself). Until that happens am reluctant for a 3rd party to become involved. Am happy to provide details afterward though as I don't believe anyone should be subjected to this. Nobody wants their children to worry about "stranger danger" in their own home!

# Peter Mericka said on February 23, 2009 3:15 PM:

Hi Clare,

Unfortunately, it's standard practice for many if not most real estate agencies - I had a similar experience when I accompanied my son to a number of "opens"; we could have filled our pockets and no-one would have known.

I can understand your reluctance to involve a 3rd party at this stage. Do be careful in your dealings with them though, as real estate agents a very familiar with VCAT and with the fine print in their Exclusive Sale Authority.

I am particularly troubled by the "stranger danger" aspect, for a few reasons. Not long ago there was a TV current affairs program which played video footage of an estate agent walking into the view of a hidden camera while he was doing up his trousers. It was later discovered that he had been rifling through drawers in the vendor's home.

The thought that "nasty" types, be they people brought in by real estate agents, or even the estate agents themselves, can have access to children's personal items is pretty scary.

I am involved with the local Scouts as a parent helper. For this purpose alone I have had to undergo a "Working With Children Check" and I have to produce my personal WWC photo ID card. Perhaps this should become a requirement where a real estate agent takes control of a house which contains personal items belonging to children.

# Stunned said on February 23, 2009 3:56 PM:

Jesus Christ! I have got pictures of my kid's as naked little nudies playing under the sprnkler and I have got them just sitting on the windowsill because their cute and innoce nt and they were there when the land lord's real estate did an open and we had to go for a walk when they did it. What if some pedophile swipes one of these pictures and puts it on the internet in a porn ring?!! I will want to sue the reAl estate for all he has got!!!!!!

# Peter Mericka said on February 23, 2009 4:04 PM:

Hi Stunned,

I would suggest that you remove ALL photos of children from view before any further inspections are conducted. And make sure you stay present while strangers are in your house - the estate agent can NOT require you to leave during inspections.

Most thefts from open houses go unnoticed for long periods of time, usually because home owners initially think there's an innocent explanation, or that the items have simply been misplaced. (For example, a theft victim tried to think of an innocent explanation when he first discovered something was wrong:

"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." From: "Open For Inspection - Open For Theft!"

I can imagine the horror a parent would experience if the police called to ask questions about who took certain photos and how they found their way onto the internet etc.

# Video said on February 23, 2009 4:25 PM:

In the last post you talked about video recording auctions but how about videoing house inspections?

# Denise said on February 23, 2009 4:34 PM:

It makes my blood run cold when you think of the risks families are exposed to through agent's neglect. I immediately put the complaint in writing to our agent and a director of the agency. To date, they haven't taken the time to provide a response to this issue but no doubt will take the time to put their bill together. I have NEVER been to an open for inspection without having to provide photo ID as a condition of entry. Would have thought taking personal details was a legal requirement or part of the Real Estate Code of Practice, (it was our specific request right from the beginning of the contract in October) What did the agent think he was supposed to be doing when he was standing in our hallway letting all those people in that Saturday afternoon in January?

# Denise said on February 23, 2009 4:39 PM:

That would lessen the problem of theft but not the problem of knowing exactly who was in your house. I think a combination of both is a good start. However unless the agent insists upon photo ID as a condition of entry, you may just end up with a video of your goods being stolen!

# Peter Mericka said on February 23, 2009 4:59 PM:

Hi Denise,

The example I gave above of attending an open with my son involved the giving of a photo ID, but the agent did no more than take names at the door and allow everyone to wander at will.

Photo ID does very little at the end of the day. Sure, it will assist in identifying who was in the house, but not what they did while they were in there (see the example above of the estate agent whose ID was certainly known, but it didn't stop him from getting up to mischief when he was by himself).

In my capacity as a former police detective, I can say with some authority that knowing who was in the house at a particular time is good, but it's not much good if the disappearance of an item cannot be pin-pointed to a particular time.

No magistrate would issue a search warrant against a group of "suspects" simply on the basis that they had attended an open house from which items had been stolen. And police would not call on visitors and accuse them without very strong evidence.

Photo ID may also work to assist the thief insofar as it allows the thief to argue that it must have been someone else.

"After all, I was honest enough to give all my details, so how could it have been me?"

Sounds good, doesn't it. Or:

"Just because I have a criminal record doesn't mean I stole stuff, I gave my photo ID before I went in."

And is an estate agent going to give evidence against someone he took to the property and undergo rigorous cross-examination, particularly when it's easier to say, "I was there and if anything was taken during that visit I would have seen it". And what would vendors think of an estate agent who has been responsible for letting a thief into someone's house?

I believe that there are plenty of situations where the estate agent has known exactly what happened, but has chosen "not to get involved".

It all comes back to the need for the occupier of the property, whether vendor or tenant, to conduct the inspections in person or to be within sight of each and every visitor.

Visitors also feel confortable when they know that they can't be accused of anything because the vendor was present the whole time.

# jodi said on February 23, 2009 5:18 PM:

I don't mean to extrapolate this too much, but what's to stop an anonymous stalker from coming through the property whether the agent or the vendor is conducting the open? Your toothbrush or whatever is still going to be accessible, criminals can still 'case' your property, and the guy or girl working down the servo who has a crush on you can still get a sense of personal details about you just by being in your space. Which is a bit creepy, but luckily you're moving anyway, right? I doubt Ted Bundy had the time or inclination to spend his Saturdays being conducted through staffed tours of other people's homes, and i don't mean to be overly facetious when i say that. We can live in a very paranoid society or we can just go about our daily lives with a sense of caution or awareness. There would be no open houses at all, among other things, if you factored in every possible distasteful or criminal scenario that could occur.

# Peter Mericka said on February 23, 2009 6:02 PM:

Ho Jodi,

There is no need to do away with opens. They just need to be modified so as to ensure that the vendor is always present, that's all.

As I have indicated, there is no reason for an estate agent to show people through your house when you're selling, and the only reason estate agents do this is to manipulate vendors and purchasers.

Why can't the vendor show people through their own property and do away with the risk. Even if an estate agent is involved, the vendor should accompany all visitors through the property. This isn't too much to ask is it Jodi?

# jodi said on February 23, 2009 6:22 PM:

sorry, i was under the impression the above comments were alluding to a 'buyer' doing something unsavoury regarding some children's clothes or personal possessions. the way the comments were building did nothing to dispell that impression. i was merely suggesting that if there is a disturbed person doing disturbing things in or around your property, the relevance of who is present, and whether they are a paid agent is lessened. The overall question of accessibilty becomes more relevant.

# Peter Mericka said on February 23, 2009 7:27 PM:

Hi Jodi,

I'm just trying to get a handle on where you're coming from. Sure, it's nigh impossible to stop a determined kook from doing something kooky, but that's hardly the point here.

What we're discussing is that a real estate agent (who is himself a stranger) should not be showing other strangers through your house.

The assertion is that there is no need to have an estate agent do this (and increase the risk of strangers behaving badly) when the vendor can do it, and do it much better than any real estate agent can.

Jodi, do you agree that the risk of unlawful rummaging, theft and paedophile prowling during opens would be reduced if the owner were present?

# jodi said on February 23, 2009 7:44 PM:

I can't argue with you regarding the pragmatism of vendors conducting sales themselves or accompanying agents during opens.

# Austin said on February 24, 2009 3:08 PM:

To be fair, that's not really the issue here, Peter.

I don't do my own surgery because I would rather entrust it to a qualified expert - if he is negligent or demonstrates incompetence, he becomes liable for damages, to an extent.

I would argue that the position the real estate agents are now in is one of faux-responsibility but no actual liability; as you say, they can argue that a perpetrator was 'invited in'.

Peter, turning the question around, do you believe estate agents would be suitable candidates to hold open house inspections if they:

- assumed a reasonable amount of liability, and

- were properly qualified to be on the lookout for suspicious people?

Regards,

Austin

# Peter Mericka said on February 24, 2009 3:37 PM:

Hi Austin,

I think a good analogy is someone telling women to bottle-feed rather than braest-feed. If there is a demonstrably good reason to resort to the bottle (and I use the word "resort" deliberately), then perhaps in some instances bottle is best.

It is up to real estate agents to demonstrate that there is a need for their involvement in property inspections, before we even get to the point of considering whether the risks associated with such involvement are warranted.

Real estate agents really don't want to be driving to properties after hours, nor do they want to be standing in doorways taking names and addresses, or attempting to answer questions the answers to which only the property owner knows.

But real estate agents do want to control the sale. Conducting property inspections is a bothersome means to an important end for the real estate agent, in that it gives him or her control over potential purchasers (and a source of future listings), and control over the vendor (including the opportunity to deceive).

Austin, your suggested "qualifications" regarding responsibility, integrity, surveillance and detective skills implicit in your question do not even arise unless and until we can establish that there is a need for the real estate agent to replace the vendor in property inspections.

So far there has been no cogent argument advanced in favour of "bottle-feeding".

# Austin said on February 24, 2009 4:03 PM:

Hi Peter,

Respectfully, following that logic, why would I technically 'need' a surgeon, then, in my example?

# Peter Mericka said on February 24, 2009 4:21 PM:

Hi Austin,

Why indeed. Perhaps you suffer from Munchausen Syndrome and you think you need a surgeon when in fact there's nothing wrong with you.

First, let us determine whether or not you do need a surgeon. Then, if there's something wrong with you that may surgical intervention, we can advise you of the risks associated with surgery and you can make an informed choice as to whether you "need" or want a surgeon or not.

What we don't want is consumers being brain-washed into believing that every tummy rumble requires surgical intervention, when a dose of self-administered Eno will do the trick.

# Austin said on February 24, 2009 4:39 PM:

Hi Peter,

I guess my underlying point was that, given your argument, why would a vendor consent to an open inspection if they could do it themselves? Probably for the same reasons that stop them selling their property themselves; namely, time and effort.

True, also, that the estate agent does their best to feel 'necessary' to the sale, but, the impression, whether accurate or not, given by an agent of newspaper sections, large billboards and, yes, open house inspections, must seem to be a monumental task to undertake by the vendor themselves.

Just like surgeons, if there are people out there:

- willing to do a service for you in order that you don't have to do it yourself

- willing to accept liability for their services and not just wash their hands of the whole thing

- qualified in detecting/preventing the above mentioned criminal activity

...then I don't see the difference. As you say, surgery always carries clear advice of the 'risks' involved. If such risks were presented to the vendor, then perhaps that could be a step forward, for starters.

Regards,

Austin

# Peter Mericka said on February 24, 2009 7:31 PM:

Hi Austin,

The reason why vendors consent to an estate agent conducted open is because real estate agents have been able to convince consumers that there is a benefit in having the real estate agent do them.

I have argued that real estate agents don't really like being involved in property inspections - they only do them because it gives them control.

Austin, real estate agents are never around to help with the "heavy lifting" in a real estate matter. They don't want to take responsibility for anything (lawyers always prepare the disclosure statement and the contract - estate agents only get involved to make sure the sale takes place).

And when things go wrong because they have misled, deceived or made mistakes, their advice to the suffering party is, "the lawyers will sort it out". They then attempt to influence the lawyer so as to be absolved from blame.

It's no different with property inspections. If the real estate agent could allow the vendor to look after the inspection he most certainly would. But the real estate agent needs to ensure that he has control, not only of the vendor, but also potential purchasers (who also represent potential listings).

Austin, your proposal that real estate agents take some responsibility for the property inspection would make them choke!

Hands up all the real estate agents who are willing to:

Conduct opens as a service to the client, and not as an opportunity to control or to gather potential listings;
Accept full responsibility for the safety of the vendor's personal belongings;
Gain the qualifications and licenses necessary to allow you to act as a security guard/crowd controller;
Allow the vendor to remain present and to assist in answering questions that are beyond your knowledge, and not tell the vendor to leave the property until the inspection is over;
To take only qualified potential purchasers to the property, and not use the visitor as part of an "impressions parade".

Austin, they just won't do it.

An alternative to vendor inspections could be something similar to what the Scottish call "Granny-sitters". In Edinburgh vendors conduct their own opens, but elderly people often engage someone (like a security guard) to be present during the inspections, which are commonly held on Saturdays and one night during the week.

This allows the vendor to have someone who is there to assist, not to control. Who knows, it could be the start of a new industry.

# Paul said on February 24, 2009 9:46 PM:

Dear sirs

I have been to numerous open houses and I have also gone to numerous inspection by appointments and the agents did absolutely nothing to help me decide to buy. I got annoyed from being made to wait for the agent and I would much prefer to talk to the prperty owner but the agent always makes sure you cannoit talk to the owner because the owner is never there

# sam said on February 26, 2009 12:33 PM:

you don't like agents much do you?

# Peter Mericka said on February 26, 2009 1:03 PM:

Hi Sam,

When I was a policeman friends would ask, "Don't you hate crooks?" I would tell them that such a question is meaningless because it's not a matter of "hating crooks", it's a matter of dealing with bad deeds performed by otherwise decent people. After all, so-called "crooks" can be good parents, supportive members of the school committee, and decent community-minded people.

It's the same with real estate agents. I have no problem with real estate agents as people. The problem Sam, is that real estate agents are forced to operate in an environment of systemic corruption. They are victims, just like those who fall victim to them.

In the present case, a paedophile who steals photos of children from an open house while the real estate agent is busy taking names at the front door makes a victim of the real estate agent, as well as those who put their trust in that agent.

What can make agents bad people, however, is when they know that what they are doing is bad, and they do it anyway.

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Estate Agents Should NEVER Conduct Inspections

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