Chicago based real estate author, broker and columnist, Mark Nash, discusses his upcoming visit to the Library of Congress.

What will you be speaking about?

Home buying, selling tips and trends for the 2007 transitional residential real estate market.

Can you expand on the transitional part of your speaking topic?

Home owners and buyers understood that the frenzied real estate market in 2002-2005 was not the same one that we saw in 2006. The frenzied market was short on supply and strong on demand. Home sellers ruled. In 2006 with saw a shift to a more balanced market, featuring rising supply and weaker (but still the third strongest year on record) demand. However, many headlines gave home buyers the impression that they now ruled, which was not proven out, as prices rose in some delayed-fenzy markets, held or adjusted downward much less than the bubble-mongers predicted. The first half of the 2007 market could feature "deferred demand" buyers from 2006.

Bubble-mongers? Can you explain that?

There seemed to be an effort by some to manipulate the residential real estate market by paralleling the rise in the housing market to pre-tech stock bust. The real estate bubble and the tech bubble were joined at the hip in the bubble-mongers minds. If you drilled down into why the mongers were mongering, they had structural issues with the residential real estate industry. What complicated the mongers interpretation of the realty marketplace was a lack of understanding of the industry from the day-to-day to the broader issue that real estate markets don't act and react like the stock market.

Briefly, why shouldn't we compare the real estate and stock markets?

The real estate marketplace is one of borders, lot lines, counties, and states. The stock market is business without borders or global. Real estate is fixed to the land unlike the stock market that is not. A home will always have a value (even $1) but a stock can be worth zero. Real estate or shelter is a need; the stock market is a want. Real estate is less liquid than stock certificates. The stock purchase or sale transaction is federally regulated, whereas real estate laws and licensure is regulated by the states with some federal oversight. The stock market has portfolio managers that control large blocks of shares; the housing market is in the majority made up of individual investors or homeowners. If a company wants to generate more shares, they split their stock. Because of zoning restrictions a home can't be split. It's a much longer conversation.

What are deferred demand buyers?

Bubble headlines, high gasoline prices in the summer of 2006 and the run-up to the mid-term election kept many buyers on the sidelines in 2006. The statistics from the industry substantiate this. But, pent-up demand by first-time, move-up and life changes are bringing buyers back to market. In late November we saw buyers out in unusually high numbers for the late fourth-quarter market. They've continued atypically high through the holidays and the first two months of 2007 despite snow and bitter cold.

How is the real estate market in 2007?

If you're looking for a generalization about the U.S. housing market in 2007, ask the bubble-mongers. Residential real estate as a whole is not a bear or a bull like the stock market. Unlike the stock market, the residential real estate market is comprised of thousands of macro markets and thousands of micro markets. Each of these markets is geographically based and has dynamics unique to them. In some markets we have seen strong single-family home sales while condominiums are soft. In other markets upper-bracket properties are languishing while starter homes in the same market are popular.

What are some of your home buying and selling tips for 2007?

Let's begin with sellers.

• Pricing your home correctly is number one in 2007. Buyers will move on if they perceive your home is not priced right.

  Today's buyers want property in its best possible condition with updated kitchens and baths. Take the time before you place your home on the market to make it show like a model. If you don't, buyers have an abundance of available homes that say "buy me."

• Market your home on the Internet. Seventy-five percent of home buyers viewed the Internet as a very useful tool in their home search according to The National Association of Realtors® 2006 Profile of Home Buyers and Sellers.

• Don't offer buyer incentives. In 2006 some real estate agents and home sellers decided giving buyers flat-screen televisions, tropical vacations, automobiles, closing costs, and other freebies would perk up buyers interest in a competitive marketplace. Savvy buyers feel home prices are raised to cover the costs of buyer incentives.

• Accept home-sale contingencies. The contingent-free contract is now just a memory. If you want to sell your home in 2007, keep an open and flexible mind on contingencies. Many buyers want to "move-up" but need to sell their home first, before they can close on yours.

• Don't ignore how long it could take to sell an attractive and well-priced home. Figure out the absorption rate for your market. This rate will tell you how many months or years of for-sale inventory there is in your market. Three months is fine, six months is okay, nine months is troublesome and twelve-plus is terrible.

• Limit open houses. The open house pendulum has swung from "the house sold in the first day" to "we need to have our house open every Sunday." Desperation is when your home is open every Sunday. Buyers know and track it. Plan on every three weeks to have a public open house.

And buyer tips?

• Don't low-ball offers to purchase on a home that is priced right. Potential home buyers wanted deep-discount deals in 2006, even if the house was correctly priced. In most situations they didn't receive them and many times paid more for a home because they offended the seller in their opening offer. Use sold comparable's from only the last six months, that's what mortgage lenders do.

• Took as fact online home valuation web sites opinion of value. Technology is great when it works, but tread carefully with online valuation websites. Ask yourself how long does it take your recorder of deeds and real estate transactions to record them? The values presented might not accurately portray the real value.

• Investigate Option Adjustable Rate and Reverse Mortgages carefully. Both of these loan products can lead to mortgage fraud by unscrupulous brokers. Option ARMS feature negative amortization, not a good thing in a home purchase and reverse mortgages are not a be all and end all for seniors, and are loaded with high origination fees.

• Research reserve funds and special assessments in all potential condo, townhouse or cooperative purchases. The building or development might look well maintained, but conduct a careful audit of budgets, association meeting minutes and reserve funds balances. Reserve funds are set-aside finances for capital improvements such as new windows, roofs and elevators.

• Consider resale characteristics. Getting out is as important as getting into a new home. The average homeowner stays in their home on average slightly less than six years, according to The National Association of Realtors®. You might love your new home, but will future buyers? High-traffic, a contemporary home in a neighborhood of colonials, or a tuck-under garage could pose a problem for future buyers.

• Don't skip performing a home inspection. Never waive the right to an inspection, the benefits of an inspection far out weigh the costs of not having one. Performing an inspection could save you numerous headaches and expenses later. Hire a professional, not Uncle Bert. In many states Carbon Monoxide detectors are now the law. Every household should have at least one regardless if a law requires them or not.

• Investigate rates of state, county or local transfer taxes paid by buyers at closing. Some buyers learn too late that they might need large amounts of extra money to pay transfer taxes in the state, county and city where they are purchasing property. Inquire when you start your search what transfer taxes rates are and who customarily pays them.

Mark will be speaking at the Library of Congress on Wednesday, March 21, 2007 from 11:30 am to 12:30 pm.