Myth
If you put $15,000 worth of improvements into your property, you should be able to increase the asking price by that amount.

Reality
If your improvements have simply brought the property up to standard, you have only made your home more competitive, not more valuable. Some home remodeling, in particular kitchens and bath-rooms, can equal or exceed the cost you invest. On the other hand, adding an amenity such as a pool could provide only a 30 to 40 percent return on your investment. However, the rates of profit vary from one marketplace to the next. It's best to consult with a CRS-Designated real estate agent in your area before you begin a major remodeling project to find out which improvements offer the best returns on investment.

Myth
You can realize a tax-free capital gain on the sale of a primary residence just once, at or beyond age 55, and must reinvest the proceeds in another home within a certain time period.

Reality
These were the regulations prior to the 1997 tax law, but the rules changed. Now, if you have owned and occupied your primary residence for at least two of the past five years, you can enjoy tax-free appreciation of up to $500,00 on the sale of the home if you're married and up to $250,000 if you're single. You don't need to re-invest the proceeds in another home and you don't need to be age 55. What's more, you can legally do this every two years if you so choose.

Myth
In the view of sellers, they gave their home away; in the view of buyers, they paid too much.

Reality
In point of fact, all transactions reflect a meeting of the minds. If the buyer and seller are mindful of what the market is telling them and they have good, professional representatives, they will respond accordingly.

Myth
As a move-up buyer, I should put my existing home on the market first and then look for a new one.

Reality
Not necessarily. It depends on factors such as general market conditions, market conditions in your particular geographic area, the kind of equity you have in your home and your general financial picture. If your existing home is very marketable, many finance programs are available that will enable you to take that home's equity, use it as a down payment to buy your next home, then put your existing home on the market and be reasonably confident that things will work out well for you.

Myth
As a seller, if I don't get more for my home than I paid for it, it means I overpaid.

Reality
Not necessarily. All sellers hope to realize a gain on their investment. But there are no guarantees. While a purchase price may be a very good deal, the market can shift downward in ways that are unforeseeable.