It is actually fairly easy to enter mercer’s house. Walk towards the quest marker. If you are in front of the house go around to the back. Lockpick the garden gate. Kill the guard. Then you will need a bow to shoot the place marked on the image:
Once inside you have to go down a level. Watch out for other guards around the place. You can go down further, but that is the wrong way, although there are some goodies down there. There is a room on the second level (the one below the level you entered the house on) which will have a cupboard called “suspicious cupboard”. Open it. Open the back panel. Then you are through and if you keep following the path you will get to the quests objective.