If you want to measure how much value a new business model adds to society, look no further than how much value it disproportionately destroys for it’s incumbent competitors. One such company is Redfin, who competes against traditional realtors with its online+offline hybrid service by breaking the information barrier with technology.

What I love about Redfin is that it doesn’t even pretend that IT is the solution to everything. Real-estate is a high-touch transaction and the Redfin buying process does involve real agents where needed. The value comes when Redfin breaks apart the transaction process and identify stages where human interaction is unnecessary…and in realty, downright expensive.

It’s true that having an experienced, traditional agent can be immensely helpful, but my challenge is, how often is that the case? and is it the same between buy-side vs sell-side? Every realtor has a story about how they stepped above-and-beyond to create value for their buyers, but what portion of transactions are really just “business as usual”? “Usual” means “routine”, and routine can be routinzed. The thing to keep in mind here is not to look at real-estate transactions as a single process, but to break it down and find pieces that are addressable by automation.

Redfin is probably more meaningful to buyers. Sell-side is a different animal, where success is measured by time-to-sell and sell-price. How do you improve those two factors? by having a really damn good salesman of course. But on the buy side, the key driver to success is quite simple: information, and having a realtor do the job of gathering information for you is of questionable value.

I leave you with a memorable quote from the 60 Minutes segment:

“Now here’s what Glenn Kelman of Redfin says: ‘The price of homes has gone through the roof, pardon the pun, over the last several years. And yet your commission has still stayed at six percent,’” Stahl remarks. “You’re not lowering your commission to give the buyers this advantage. You’re just raking in the money?”

“Wish that were true,” Arends [a top RE/MAX agent in Seattle for 18 years] says. “I think what’s happened is a lot of expenses have gone up, everything from postage to gas, which affect real estate agents’ profits.”

Gas and postage. What a bummer.

P.S. — The title is in reference to Asif Ali Zardari, the infamously corrupt husband of former Pakistani Prime Minister who was nicked named “Mr. 10%” for his modest dealmaking style.