Tips for Tax Time Savings

Tax-time is a stressful time, especially if you haven’t prepared for it properly!   

The best way to reduce the stress is to have a plan in place! Each year, after you file your taxes, take a look at what you were pleased with and what you wish was different. Then, you can come up with a plan to help improve the following years’s tax returns.

Below, we’ve offered up some simple strategies that can help you to have a better time on your taxes next year, but if you need more specific advice, a qualified CPA is always the best person to turn to.

Tip #1: Think Long-Term

When you file taxes, it’s tempting to just go with whatever is going to get you the most money the soonest. However, you really need to consider how your tax decisions today are going to affect you in the future; in other words, think long-term!

For example, when it comes to passive index investing, people often put off selling their best portfolio pieces because they don’t want to pay the capital gains. More often than not, though, capital gains aside, selling would still be the wisest and most profitable decision over time. And that phrase- “over time”- is key; no matter what kind of decision you’re trying to make, choose the option that is going to pay off for the longest amount of time, even if it costs you money upfront or gives you a smaller-than-you’d-like amount upfront.

Tip #2: Change Custodians (if necessary)

If your current custodian isn’t working for you, or, if another custodian is offering you better service and a nice bonus to change custodians, then by all means, do it! These days, you can typically switch everything over online, meaning no hurt feelings. Plus, no capital gains taxes are involved, so it’s really a win-win, providing you research your new custodian carefully and make sure it’s a good, long-term choice.

Tip #3: Get Help from a Pro

Finally, recognize that no matter how much you know about taxes and tax law, a professional is going to know more.

As mentioned, a financial advisor can be a wonderful asset to you. Even if you don’t want to work with an advisor on a regular basis, it’s still a good idea to have one go over last year’s tax returns and point out areas in which you can do better. It can make a world of difference!

What Your CPA Wishes (S)he Could Tell You

Have you thanked your accountant lately? If not, then you probably should. These professionals have to put up with a lot and, more often than not, get absolutely overwhelmed during tax time with fixing their clients’ mistakes.

Undoubtedly, every accountant wishes, at one time or another, he could call out clients on their mistakes, but most are too polite and just grin and bear it. However, if your accountant could give you some 100% honest advice, we have a pretty good idea of what he’d say...

Don’t Ask for Help at the Last Minute                                                    

If you have some sort of tax or financial problem, such as not having kept good track of your charitable donations or 401(k) contributions, you’re probably aware of it. If you’re not sure of your weak spots or of any of the details related to your finances, that’s a whole other problem in itself.

The thing is, though, if you’re aware of problems or potential problems, bring them up to your accountant as soon as you notice them. Absolutely do not wait until the very last minute, i.e. the height of tax season, to bring up issues to your accountant.

Why? Well, first off, it’s rude! Your accountant is super busy during this time of year and doesn’t need to be swamped by your last minute requests. Secondly, if you’re fortunate enough to have a kind accountant who is willing to offer you last-minute help, it’s probably going to be rushed and not offer you the best possible outcome. If you want tax time to go well for you, make it go well for your accountant by never waiting until the last minute to bring up problems or concerns.

Turn in All Requested Forms and Information on Time

There’s a reason your accountant gives you tight and specific deadlines for when to have what information to him. That reason is so that he can give your taxes his full attention and so that everything gets to the IRS on time.

If you force your accountant to chase you down for forms and information, there’s a good chance that your taxes could be filed late and that you could incur penalties...and that will be your fault, not your accountant’s.

Remember, this professional is working on your behalf, and whatever he asks of you is in your best interest, so do it and do it on time!

Don’t Play the Blame Game

Finally don’t blame your accountant for things that are out of his control and that, more often than not, are your fault, not his.

If you lose out on potential credits because you didn’t keep careful enough records, for example, don’t yell at or fire your accountant when he tells you there’s nothing he can do.

That’s not to say that all accountants are perfect or that they don’t make mistakes. Some do. But, as long as you’ve chosen your accountant carefully and are working with someone who knows his stuff, there’s no reason you shouldn’t do what is asked of you and give a little credit (and thanks!) where credit is due.

Make No Mistake

Each year, many people attempt to do their taxes on their own. Unfortunately, mistakes are all too easy to make and can lead to reduced refunds and long waits. For that reason, many of the people who do their taxes on their own live to regret it.

While all kinds of mistakes are common, of the biggest blunders is simple miscalculation. Putting a wrong number in a column or skipping over a figure or two when doing addition will have the IRS sending you a correction form so fast your head will spin.  

Other people make the mistake of not meeting that April 15 deadline, and in case you ever wondered, yes, the IRS is pretty strict on when your tax forms are due. You could face fines and penalties for a late tax return.

It’s been said that to err is human, and while that may be true for average people, it’s not really true for professional accountants. These experts know to check and recheck their work for errors and even have programs to help them do some of that checking. Your tax return is a lot less likely to contain errors if you let a professional handle it, so unless you’re perfect, let someone in the know help you.

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How Homeowners Save Money on Taxes

Do you own a home? If so, know that you can “catch a break” in a variety of ways when it comes to your taxes. The best way to learn about all of the different tax breaks available to you and to take full advantage of them is to seek the help of a knowledgeable accounting firm in your area.

When you visit that accounting firm, you will likely learn about several different types of tax breaks, including the much-loved mortgage interest deduction. You can claim this deduction on up to two homes as long as

your mortgage loan is not for more than a million dollars. All you have to do is itemize your return, and you’re good to go!

While the mortgage interest deduction is a popular way for homeowners to save money, it’s certainly not the only way for them to do so! To learn about other ways in which you can save big, contact Susan S. Lewis, Ltd., an accounting firm in Naperville, today.

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A Soda Tax for Illinois?

Everyone knows that sodas are bad beverage choices, and many states are trying to punish those bad choices by affixing a heavy tax to soft drinks and certain unhealthy snack foods as well. The nation has attempted to pass an act, as have many states and even local towns and cities, but none of these attempts have been successful thus far. In fact, it is only outside of the United States—in Mexico—where such a tax has been successful.

All of that might change soon though. Illinois is now facing a potential tax on soda. Recently, the senator of Illinois suggested a legislation that would raise taxes on sodas to approximately 67 cents for every two liters of soda purchased.  

Unfortunately, there’s no way to know for sure if this new legislation will pass, but the fact that it’s even a possibility just goes to show that the world, at least in terms of taxation practices, is changing. A local Naperville accounting firm can help you to navigate these changes, however, and to still come out financially strong, and the best Naperville accounting firm to help you is Susan S. Lewis, Ltd.

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The Benefits of Working with an Accounting Firm

Tax time is here, and that means it’s time to pay a visit to a local Naperville accounting firm for help preparing and filing your taxes. When you choose to have a professional assist you in filing your taxes, you can ensure that all of your forms are filled out correctly and that you meet all of the deadlines for filing, allowing you to avoid costly fees and fines. Furthermore, the right accountant can help you to get the maximum return possible and/or to find exceptions that can help you to save money and pay less in taxes.  

Of course, your Naperville accounting firm isn’t just useful at tax time. You can benefit from its services all year long. Whether you need help getting out of debt, making smarter financial choices in general, saving money for a specific purpose or goal, or anything in between, know that the friendly experts at Susan S. Lewis, Ltd. can assist you.

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Paychex Makes a Move

For years, Paychex has been a major accounting firm, offering payroll and other services for small to medium-sized businesses. Recently, the firm found itself in the news as it announced its new move to cloud accounting. Like many accounting firms before it, Paychex has stepped into the future and has partnered with Kashoo via an equity investment.

Though the exact total of the investment is being kept under wraps, both by the accounting firm and by Kashoo, it must have been fairly sizable since Paychex will likely be placing two executives on Kashoo’s board, a privilege Paychex received as part of the agreement.

In this day and age, it is important for businesses that offer accounting services to stay as technologically advanced as possible in order to meet the ever-growing and changing demands of customers. For the most advanced accounting help in the Naperville area, contact Susan S. Lewis, Ltd.

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Introduction Wallet.AI

There’s a new app in town and using this app is almost like having an accounting firm in your pocket! The application, invented by Omar Green, is known as wallet.AI. Green serves not only as the maker of the app but also as the CEO of the company, which goes by the same name as the app. The software, which isn’t yet available for public use, is designed to analyze all of the data that you leave behind as you use your Smartphone at different locations. The possibilities of what the application can do once it has and has analyzed that data, however, are truly endless.

Wallet.AI can reportedly give you tips and financial advice based on your unique spending habits—imagine having the app tell you that you “better not buy that” if you want to afford your water bill! The app can even provide advice based on where you are; if you use your phone to “check in” to a particular store or restaurant, for example, the app can recommend cheaper menu items and on-sale products to you.

Of course, even the very best wallet application isn’t quite the same as having a relationship with a real accounting firm and with a real accountant who understands you and your needs. It’s okay to use apps like Wallet.AI, but make sure you’ve got the real deal too; if you don’t have a trustworthy accountant on your side, call on Susan S. Lewis, Ltd. of Naperville.  #NapervilleAccountingFirm

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Common Money Mistakes

Business owners often have a lot on their minds. They have to run and manage their businesses, of course, and they’re also responsible for keeping employees in line, keeping customers and clients happy, and a million other tasks. Because of all the stress and demands they have weighing down upon them, business owners often let a few little things fall through the cracks. This can be disastrous, however, when it comes to money management. All you need are a few missed dollars here and there and, next thing you know, you’re in serious debt and/or your business is failing. Take money matters serious if you want your business to thrive.

One major mistake that many businesses make is not hiring a Naperville accounting firm. So many people think that they can handle their taxes and general finances on their own. Plus, a lot of businesses, especially new businesses, think they will save money by handling taxes and finances internally. The truth is, however, that when non-professionals handle the finances, problems are likely to happen. When problems occur, they can often cost time and money to fix, making it better just to have things done right—by a professional Naperville accounting firm— from the start.

Businesses also need to be meticulous when it comes to managing petty cash. Petty cash provides a simple, effective way to handle little expenses in and around the office. If not managed properly, however, employees can get a little too “hands-on” with that petty cash, and money can go missing. Furthermore, it’s easy to overspend when you’re not keeping close track of what’s in petty cash.

How to Pay Off College Debt

One thing you never learned in school: how to pay for it. Educate yourself on the best ways to reduce—or eliminate—student loans.
By Vera Gibbons

The most expensive college in the United States—Sarah Lawrence College, in Bronxville, N.Y.—charges $44,220 a year for tuition. And that doesn't include fees and room and board, which can cost an additional $14,000. Even more disturbing is that the annual cost of a college education has risen by 130% in the past 20 years, according to the College Board. As a result, Americans have racked up about $1 trillion in education debt from both federal and private student and parent loans.

"People are borrowing twice as much as they were a decade ago because grants and scholarships are not keeping up with the escalating costs of college," says Mark Kantrowitz, the publisher of FinAid.org and FastWeb.com, free online financial-aid resources. To wit: Graduates of the class of 2011 have an average of $27,200 in debt, up from about $17,600 in 2001.

If you're on a tight budget, it may be difficult to steer any additional cash toward education debt. But you should try to pay it off as early as possible; otherwise it might stick around for a decade or more, which could prevent you from saving enough for retirement. Here are five steps to paying off any lingering loans of your own—and to helping your children settle theirs down the road.

1. Pay off variable private loans first.
If you or your recent grad has this type of loan—which makes up 15% of total U.S. education debt—this may seem like an odd move. After all, the interest rates on variable private loans (given by banks and credit unions) are currently lower than the fixed rates on federally backed and private loans. But historically this situation is unusual, and if the economy improves, interest hikes are probable. "Rates could climb 5% to 6% over the next four years, making your monthly burden unmanageable," Kantrowitz says.

If you can, pay twice the required amount until you have eliminated this debt and make only the minimum monthly contribution toward your fixed-rate federal loans, since those rates cannot increase.

2. Choose the right repayment plan for federal student loans.
When it comes to Stafford, Perkins, PLUS, and Direct Consolidation loans—which make up 85% of education debt—there are five repayment options. They range from the standard plan, which requires a minimum payment of $50 every month for up to 10 years, to the new, income-based plan that caps your monthly payments at a "reasonable percentage" of your income (determined by the federal government) and forgives any debt remaining after 25 years. So which schedule is best for you?

"People often make the mistake of going with the option that has the smallest monthly payment, which causes them to pay thousands more in interest over the loan's life span," says Lauren Asher, the president of the Institute for College Access & Success, a nonprofit that works to make college more affordable. Aim to put 10% of your gross (that is, pretax) income toward your education debt. Go to studentaid.ed.gov to calculate which repayment plan fits your budget.

3. Ask your employer to pay off your student loan.
A little-known way to eliminate college debt is to appeal to your boss for a compensation package. "Some midsize companies cannot pay the kinds of salaries that a large corporation can, but they may be inclined to offer lower wages in exchange for a onetime payout toward your loan," says Manuel Fabriquer, the president of College Planning ABC, a consulting firm in San Jose, Calif. Why? "It costs them less in salary payments in the long run." (Those in fields that require a special degree, like tech, finance, and nursing, are most likely to receive this benefit.)

If you're a recent grad looking for a job, bring this up during salary negotiations. Be willing to take a lower salary and to commit to staying at the job for a specific time period in exchange for a payment toward your schooling. If you're a veteran employee, raise the subject at your annual review by saying, "I've been a loyal employee for [insert time period], and I look forward to continuing to grow and learn here. As part of my compensation, can you put [insert amount] toward my loan?"

4. Consider consolidation.
If you or your child graduated before July 1, 2006, it pays to roll multiple federal loans into one—you'll lock in an interest rate that's lower than what you're paying on each separate loan. Earned a diploma since then? All federal student loans now carry fixed interest rates, so there's no financial benefit to consolidating. (And it's highly unlikely that you'll be able to combine any variable private loans.) Nevertheless, if you have trouble keeping track of payment deadlines and have been hit with late fees on occasion, go ahead and consolidate. (For more information, go to simpletuition.com or loanconsolidation.ed.gov.) You'll save some dough by doing so.

5. Sign up for auto-deductions.
You may have already realized that automatic online loan payments make your life easier. What you may not know is that all government and some private lenders charge a slightly lower interest rate (usually 0.25% less) if you make your monthly remittance this way. Over 25 years of payments, you'll reduce your repayment period by at least a year, says Reyna Gobel, the author of Graduation Debt. Best of all, you can sign up now, even if you've been repaying your loans for years.

Contact Susan S. Lewis & Associates a Naperville Accounting firm for tax benefits resulting in college loan payments, or for Naperville Education Planning Services, contact Platinum Financial, the sister company of Susan S. Lewis Ltd.

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How to Give Like a Billionaire

Do more for your favorite causes without giving away a fortune.
By Dan Kadlec, with additional reporting by Ryan Derousseau

Among the über-rich, giving uber-big has become uber-chic. Billionaires such as Warren Buffett, Bill and Melinda Gates, and Oprah Winfrey have pledged huge sums to charity. While you might not be able to match their checks, you can have a bigger philanthropic impact than you think by borrowing from their playbook.

Billionaires often concentrate on a few key causes. You can write bigger checks to fewer charities.

There’s nothing wrong with contributing $20 here and $100 there to a bunch of charities. But making a bigger impact on a single cause can be more fulfilling. Think Gates and global health, or Oprah and schools for women. A gift of just $250 to $500 can make a substantial difference at some nonprofits, says Richard Marker, a senior fellow at New York University’s Center for Philanthropy and chair of its Academy for Grantmaking and Funder Education. In return you’re likely to get far more access and invitations to special events. Development directors at small charities are often willing to listen to suggestions from large donors, says Eileen Heisman, CEO of the National Philanthropic Trust.

Helping to fund a project can often be more satisfying than giving money, says Marker, as you’ll really be able to see the impact of your donation. You may even be able to cover the full cost of a specific project, such as restocking the library of a senior center or giving new uniforms to an inner-city basketball team. If you like the idea of fully funding a need but don’t have deep pockets, check out DonorsChoose.org, where teachers post requests for materials such as lab equipment or a set of drums for the school band.

Billionaires are businesslike about giving. You should plan out your giving for the year.

True, Buffett doesn’t sit down on Dec. 31, checkbook in hand, trying to remember how much he’s already donated during the year and to whom. Most donors, however, respond to appeals in a haphazard way and don’t bother to keep tabs on gifts until tax time, says Sean Stannard-Stockton, CEO of Tactical Philanthropy Advisors in Burlingame, Calif. "If you don’t keep track, you’re likely to give less - not more - than what you had envisioned," he says.

A better idea: At the beginning of the year, settle on how much you want to give to charity, and work that into your budget. Then set up automatic quarterly payments from your checking account so that you’ll stick to your commitment, as well as spread your giving throughout the year.

Billionaires take their wealthy pals on a weekend retreat and hit them up for pledges. You can round up your friends and pool your resources.

Teaming up with a dozen or so friends to make a large gift to a single charity has become easier, thanks to social networks. On Facebook you can use the Causes application to create a page for a charity you want to support. Then invite friends to join the cause and give money through the site. You can use Twitter to broadcast news about a charitable goal you’d like to accomplish, what your deadline is and updates on how you’re doing. "It helps if there’s a sense of urgency," says Beth Kanter, author of The Networked Nonprofit.

Offline you can form a giving circle - a small group of like-minded people who pay annual dues and meet a few times a year to discuss causes they’d like to fund. And check to see if you might be eligible for a program to match charitable gifts at your company; large firms may offer matches.

Billionaires have fancy foundations. You can open a donor-advised fund to spread your giving over time.

The ultrarich love the prestige of foundations, and the tax benefits don’t hurt either. You can get many of the same benefits with a donor-advised fund. Some brokerages offer donor-advised funds, or you can set one up through a religious group or university or through a community foundation - a nonprofit or trust that pools money from many donors to support local charities.

When you open an account - $5,000 to $10,000 is typically the minimum - you can take an immediate tax deduction for the full amount of your gift. The money then grows tax-free, and you direct the fund to donate on your behalf whenever you like. Brokerage-based funds tend to have the lowest fees and minimums and the widest selection of charities you can support; a community foundation will offer more advice and know about local needs, says Denver financial planner Ray Benton. (Find community foundations in your area at the Council on Foundations Website, cof.org.)

Billionaires sit on nonprofit boards. You can give your time to your favorite cause.

Don’t underestimate the value of what you can provide. A typical volunteer hour at, say, a soup kitchen or in your parks department is worth $20.85 to the organization, according to Independent Sector, a group that tracks nonprofits. If you have professional skills - medical, legal, accounting, tech - your time is worth around $100 an hour, estimates Social Venture Partners International, a nonprofit that supports philanthropy.

Volunteering is most valuable when you are dependable. Commit to at least four hours a month for one year, and shoot for a role you’re prepared for so the charity doesn’t have to train you, says Heisman of the National Philanthropic Trust. You can’t write off the value of your time on your taxes, though any expenses you incur, such as office supplies or building materials, are deductible. You’re not likely to reap giant tax savings from volunteer work, of course. Says Heisman: "Charity is about more than the tax benefits."

Find out more about how giving to charity will affect your taxes with a consultation with Naperville Accounting Firm, Susan S. Lewis CPA

Adapted from the December 2010 issue of Money. © 2011 Time Inc. All rights reserved.

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How Does Inflation Affect Your Taxes?

Nobel prize-winning economist Milton Friedman once said that “Inflation is taxation without legislation.”¹ You’re probably aware of how taxes reduce your earnings, but have you thought about the effect of inflation?

Over the last 50 years, U.S. inflation (as measured by changes in the consumer price index or CPI) has averaged a little more than 4% a year.² A hypothetical investment earning a 5% average annual return during this period would have returned only about 1% after inflation. The rate of return would have been further reduced by income taxes.³

Inflation, which was near zero in 2008 during the depths of the recession, reached almost 3% in 2011.⁴ If you want to help protect your investment dollars from future inflation, you might consider Treasury Inflation-Protected Securities (TIPS). Not only do TIPS have similar earnings potential to other Treasury bonds, but they are adjusted for inflation. If the CPI rises, the principal value of TIPS increases. If the CPI falls, the principal value falls. TIPS pay interest twice a year, and the investor receives either the original or the inflation-adjusted principal (whichever is greater) when they mature.

The principal value of TIPS fluctuates with market conditions. As the principal amount grows, so do the interest payments, which means that the income generated has the potential to increase over time. However, unless you own TIPS in a tax-deferred account, you have to pay federal income tax on the income plus any increase in principal, even though you won’t receive the accrued principal until the bond matures.

U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. If not held to maturity, they may be worth more or less than their original value.

1) brainyquote.com, 2012
2, 4) Thomson Reuters, 2012 (CPI for the period 12/31/1961 to 12/31/2011)
3) This hypothetical example is used for illustrative purposes and does not represent the performance of any specific investment. Actual results will vary.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent Naperville Accounting Firm or advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. Copyright © 2012 Emerald Connect, Inc.

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Why It's Safe to Sell Your Home Again

As the real estate market begins to thaw, it's time to rethink strategies for pricing and marketing your house.
By Lisa Gibbs
Given the lackluster housing market, Meghann and Cort Battles didn't expect much when they listed their four-bedroom home in a Denver suburb for sale in January. So they were taken aback by the onslaught of interest. Meghann juggled 32 showings in the first month. "It's just crazy," she says.

Wait, isn't the real estate market still supposed to stink after five straight years of falling prices? Turns out that while analysts debate when the market will hit bottom, for a surprising number of cities the turnaround has already begun. In December prices rose in 109 of the 384 metro areas tracked by the data firm CoreLogic. Scrub out foreclosures, and that figure climbs to 169.

If you think that recovery means a return to the boom's double-digit price increases, forget about it. "The market won't suddenly snap back," warns CoreLogic economist Sam Khater, who has studied past housing busts. And for harder-hit areas, such as central Florida and the Rust Belt, improving may simply mean things are less bad than they were two years ago.

No matter where you live, though—or where you want to live next—the strategies you employ to sell your home must change to reflect the realities of what's now a healing market. The rebound is likely to creep rather than surge ahead. Yet if you know how to price and market your home properly, you can list your home with confidence that it will sell reasonably quickly and close to your asking price.

See if your town is near recovery. Many economists predict that 2012 will be the last year overall housing prices decline, as the final wave of foreclosures from the slump hits the market. After that, prices should inch up: 2% in 2013, 3% in 2014, according to a consensus of analysts tallied by Moody's Economy.com.

Why? Against a backdrop of low mortgage rates, employment has improved slightly, and home prices have fallen long and hard enough that buyers are beginning to realize that they won't necessarily lose their shirts by purchasing real estate. To see if your neighborhood is on the verge of a rebound, you have to look for the signs.

For instance, is local employment on the upswing? The improving jobs picture has led to shrinking housing stock across the country, as enough investors and bargain hunters have come on the scene to unclog the glut of foreclosures that's been blocking a recovery. Also, "builders are not putting up very many new homes," says Celia Chen, who follows housing for Economy.com.

Understand the buyers' psychology. For years buyers were scared of overpaying for a home. They're less so now, but they've grown accustomed to thinking that they'll score deals, so they tend to act slowly, and they typically start bidding around 10% to 15% below list price.

Denver real estate agent Ron Buss says he sees this all the time with clients such as Aaron Blankenship, who lost 10% when he sold his home in Rochester, N.Y. last year to move to Denver for a new job with Molson Coors. Blankenship, 37, is biding his time renting as he looks for a new home. "I'm much more risk-conscious," he says. "It's a challenge figuring out how much we really want to spend and how much we really want to be tied to our home."

The cautiousness is not just in people's heads. Lenders are still stingy about approving mortgages, and buyers must be sure that whatever price they offer will pass muster with the appraiser and the bank. "It's been a little better in the last few quarters, but credit will take five years to sort itself out," says Economy.com's Chen. Still, a growing number of buyers realize that if they wait too long in this market, they may miss out.

You can hold firm on price if you're patient. The days of having to deal with low-ball offers are coming to an end. Ask Deanna White. The divorced mother of two says she didn't need to sell her home in the Denver suburb of Highlands Ranch; she simply wanted to downsize. In July the house next door, smaller than White's, sold for its list price of $337,000 in three weeks. In August a three-bedroom down the street went for $341,700 in five days. So in the fall White, 41, decided to go for it, buoyed by the fact that she wasn't in a rush to move. Her home, listed at $365,000, attracted offers of around $330,000. White didn't bite but adjusted her price to $359,000. After a holiday lull, activity exploded, and White agreed to sell for $354,000.

The higher your price, the more patient you must be. Cheaper homes are affordable to more buyers and appealing to investors, so recoveries usually start there. Also, jumbo mortgages that aren't government-guaranteed—loans above $417,000 and up to $625,500 in high-cost areas like New York—not only charge higher rates but also come with tougher underwriting standards, further slowing things down.

Screen your buyers. Working only with buyers pre-approved for a sufficient mortgage has long been standard advice. But with more offers rolling in, a good agent will call loan officers for more information. There's an incentive for borrowers to grant their loan officer permission to talk. "If I'm going to speak with a listing agent to advocate on my borrower's behalf, I clear it with the borrower first," says mortgage consultant Kym Poladsky. "Most borrowers who are competing want you to help get their offer accepted."

Get the price right the first time. Set a realistic price from the get-go so your house doesn't look like a throwback to lousy price-slashing times. Think like an appraiser: Analyze comparable sales (look for price per square foot) and see how long competing homes have been on the market.

Scouting active listings is also crucial, says appraiser Matthew George. "You have to know what you're competing against," he says. Before listing, arm yourself with a simplified evaluation of your home, called a summary or restricted-use appraisal ($150 to $200). To find professionals in your area, go to appraisalinstitute.org.

If you think you erred in pricing, act quickly and decisively. Are you getting lots of showings but still no offers after 30 days on the market? Cut the price by at least $10,000, says Justin Knoll, chairman of the Denver Realtors organization. At that point, you can hold firm on price and try to negotiate offers up.

Let your home's value dictate the price. This advice may seem self-evident, but owners may have lost sight of it during the bust. On the one hand, some sellers clung to the false hope of a return to boom prices, so they set prices unrealistically high. Others may have gone too far the other way—by setting the price on their higher-end home below jumbo loan levels simply to draw more interest. In an improving market, that type of thinking isn't necessary.

Understand that you're no longer competing with gutted foreclosures. Buyers are tired of looking at worn-down, neglected, distressed properties and often don't have much extra money to do a lot of fixing up. "Clients tell me all the time, 'I'll spend a little more for something that's ready to move into,' " Knoll says. "Sellers need to take advantage of that."

Take care of structural and cosmetic necessities—but not much more. In lean times, forking over $50,000 for a new kitchen may have seemed like a necessary move to stand out. That's probably the wrong thing to do now, says George, the appraiser. Instead, stick with such basics as paint and flooring. Fix things that will come up in inspection. And respond quickly to feedback. If an issue arises over and over in buyers' reactions, it needs to be addressed immediately.

The information contained herein represents the opinions of a third party and does not necessarily represent the opinions of Naperville Accounting Firm, Susan S. Lewis LTD. and Platinum Financial and are unaffiliated with any of the entities referenced above.

Adapted from the April 2012 issue of Money. © 2012 Time Inc. All rights reserved.

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