20181102 Insurance vs Estate Agency, Part 2

20181102 (Fri)

What is the difference between an insurance agent and an estate agent? Part 2.

Would then agents like insurance agents and property agents be redundant?

Two factors aside (undisclosed principal & client’s money), estate agency is different from insurance because of uniqueness of the property. No two properties are the same. For example, prospect A saw the property and booked for it. It cannot be sold to prospect B unless A declined the purchase. However, for insurance, policy A can be sold to many customers. In fact, similar policy A can be sold again and again without considering if the previous customer can or cannot purchase the policy.

May be a computer programme can schedule such processes like e-auction or e-tender, whereby there is a closing date for the offers, and property owners can make decision based on what are available. However, when property A is sold to client X, the same cannot be sold to client Y. Therefore, there is a need to ensure no two offers are accepted as there cannot be two similar properties. The trick is human do NOT make decision like computer, so without following up (agent calling client), there cannot be offers coming in for the best outcome. And, what a seller wants is a higher value for his property. Creating demand and getting offers is a way to increase the outcome of a successful sale.

So, insurance is more vulnerable to technology replacement than estate agency. Due to its uniqueness, estate agent who holds a negotiation has to ensure smooth closure of the deal (irrespective of positive or negative outcome) so as not to compromise the outcome.

One property can only be sold to one party (be it an individual or company) because it is a unique entity. You cannot duplicate a property like an insurance policy and sell to many clients.

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