“Clutter eats equity — takes up space and makes it feel smaller,” says Barb Schwarz, CEO of StagedHomes.com. “Most sellers have too many things.”

Whether you’re selling your home, or just looking for a way to tackle the stuff accumulating, here are some tips to cut the clutter:

Purge

Take a critical look at your belongings and decide whether you need it on a regular basis. Keep only what you really love, use or wear. If you’re unsure whether you’ll miss a sweater or an old magazine, put it away and see if you still want it after a couple of weeks. Chances are you won’t miss the item.

Assign a Place

Always looking for your keys or the remote or paperwork? Assign a place for that item and keep it there. Buy bins, label them and encourage members of your household to put things away in their proper place. Make sure that the bins are in a place that makes sense— it shouldn’t be harder to find the items when they’re organized.

Save your time on the stairs as you go up and down to return things to their proper place. Place a bin at the bottom of the stairs and put items in there that need to go upstairs, When you head upstairs for something, take the bin along with you and return the things to their proper place.

Turn Clutter into Decor

A tight grouping of items— glass jars holding office supplies for instance— can look like a planned accessory for a room. Woven baskets for blankets, or wooden crates for bathroom cleaners can all stand on their own in a room without making the space seem cluttered.

In short sales, homes are sold for less than what is owed and the bank forgives the excess debt. Banks have been reluctant to approve such deals in the past — since they take a loss on the home — but in certain cases, it's become a much better proposition than letting the homeowner fall into foreclosure.

This new approach by the banks has startled plenty of homeowners, according to Elizabeth Weintraub, a Sacramento-area real estate agent who specializes in short sales.

"Initially, the homeowners are skeptical," she said. "The bank may have already turned down their request for a modification. Then, one day, they call and say, 'Let us give you some cash.'"

When Chase Mortgage (JPM, Fortune 500) told Angelique Pierce, that she would receive a check for $25,000 if she sold her house, she couldn't believe it. "I got the offer in the mail," said the Rancho Cordova, Calif. resident. "I called my bank to ask if it was real."

After Pierce became disabled a few years ago and had to stop working work, she fell behind on payments on both her first and second mortgages, valued at $250,000 and $50,000, respectively. Now, she's trying to sell her three-bedroom ranch for just $95,000 — almost half of the $179,000 she paid for the place in late 2002.

Foreclosure free ride: 3 years, no payments

From the bank's point of view, the offers make sense, according to Tom Kelly, a spokesman for Chase Mortgage, who would not comment on Pierce or other individual cases. "The first choice is a modification but if that's impossible than a short sale is a faster, more efficient solution," he said.

For the banks, foreclosure has become an increasingly difficult and expensive option. Homeowners have learned to fight the banks tooth and nail, dragging out cases for years.

And as the cases drag, expenses grow. Homeowners not only stop paying their mortgages but they stop paying property taxes and conducting normal maintenance as well. Roofs, siding, plumbing and other parts of the home deteriorate and the property loses value. By the time banks take possession, they're out tens of thousands of dollars.

Foreclosures: America's hardest hit neighborhoods

"I've seen a lot of foreclosures for sale where it would cost a lot more than $20,000 to get them into condition to sell again," said John Hayton, a short sale specialist in Orlando, Fla, who has had a number of clients receive offers from the banks.

Short sales also command higher prices than foreclosed homes. In December, foreclosed properties sold for an average of 22% less than conventional sales, while the discount for short sales was only 14%, according to the National Association of Realtors.

All that has been true for years, but it is only lately that these outsized incentives, which Bloomberg recently reported on, have surfaced.

Sellers are more cooperative when they're going to receive a five-figure check for their troubles.

Nick Chaconas, an agent with discount broker Redfin, wondered why one seller was so anxious to sell their home. "Since I represent the buyer, I didn't even know about the incentive until the closing," he said. It turned out that the seller's bank was writing her a check for $30,000.

What the foreclosure settlement means for you

Whether sellers can expect incentives from their banks depends on multiple factors, including where they live.

Wells Fargo (WFC, Fortune 500) limits its offers to certain states, such as Florida, where the foreclosure process can be lengthy, according to spokeswoman Veronica Clemons. The bank has paid $10,000 to $20,000 to borrowers who short sell or transfer their title to Wells via a deed-in-lieu.

Bank of America (BAC, Fortune 500) had a pilot program in Florida that paid incentives of $5,000 to $20,000 for sales that were initiated between Sept. 26, 2011 and Nov. 30, 2011 and close by the end of this August. The amount of the incentive is based on 5% of the unpaid balance, with a $5,000 minimum and $20,000 maximum.

Jumana Bauwens, Bank of America's spokeswoman, called it a "test-and-run program" that may be expanded to other states.

The offers are not always a panacea for homeowners struggling to pay the bills, however. Pierce, for example, has not been able to make hers pay off. She had a buyer but her second mortgage holder refused to go along with the deal unless it got a share of the $25,000 she was being offered by the bank. She said that the bank balked at the deal and the sale was cancelled.

She's looking for another buyer, but it's up in the air if Chase will honor its original offer if the second mortgage holder won't cooperate.

- CNNMoney

Private Mortgage Insurance

This is added on to your mortgage when the down payment is less than 20 percent. You can buy a home with less money but you’ll pay the PMI which covers the lender should a homebuyer default on the loan. As you build up equity, your PMI drops off.

Taxes

Property taxes generate revenue for municipalities, counties, and schools. It’s an expense that can vary across the U.S. However, on average, it’s 1.38 percent of the home’s value. Back East tends to have the highest property taxes.

HOA Fees

Homeowners’ Association fees (HOA) can add several hundred dollars to your monthly household expenses. These HOAs help to maintain common areas, typically within condominium complexes. They also govern what can be done to the unit and the surrounding area. While there is an up side to HOAs, some buyers prefer to have more freedom over their property, perhaps, until the neighbor paints his house turquoise with red accents.

Homeowner’s insurance

Lenders require homeowner’s insurance on your property. The amount you’ll pay depends on many variables including: where you live, the age, type, size of your home. For example, older homes can cost more to insure due to the fact that they may require more repairs than newer homes. Also, high-hazard areas can cost more to insure and some insurance companies may not offer an insurance policy for your home, if you’re in a high-risk area.

Inspections, appraisals, and closing costs

Many buyers understand they will have closing costs but they fail to budget for other items such as a home inspection. Sometimes inspections are paid for by the seller but it’s usually the buyer who pays for the inspection. And, even if the homeowner recently had a home inspection and has the report, a buyer still might want to pay for an inspector to have another look to compare the findings.

Depending on the home, there may also be other inspections such as for lead paint, pests or radon gas.

Utilities and appliances

These areas can be overlooked because when people are renting the appliances are taken care of. When you own your own home, be sure to consider expenses such as the A/C, water heater or dishwasher breaking down. While, you can’t exactly figure out when an appliance is going to quit working, you can set a monthly allowance aside to start establishing a household repair fund. Just don’t touch the account or when you really need it, you’ll find it’s not there for you.

While the extra expenses do add up quickly, if you carefully budget and plan ahead, the goal of homeownership is achievable and very satisfying.

So how can you beat the competition to get a foreclosure?

Get the first look: Fannie Mae and Freddie Mac’s First Look program offers first-time home buyers and others who need financing and are looking for a primary residence the first opportunity to see bank-owned homes before investors. Buyers have a 15-day window to submit offers before investors have the opportunity to start bidding.

Submit a competitive offer: Homes priced at heavy discounts can be in high demand and attract multiple bids. Lowball offers won’t likely be considered. Some housing experts suggest starting with your best offer. It is good advice is to offer the most you feel you would ever pay for the property. By submitting your "highest and best" offer from the start you are showing the bank you are a serious buyer.

Make a large deposit: If a buyer wants to get the banks attention, they could offer a larger than typical good-faith deposit. But if the buyer has to back out of the deal for some reason, he or she may be at risk of losing the deposit.

Even if buyers really want the property, they should not cave in to unreasonable demands, like waiving a home inspection. Otherwise, it may be a decision they quickly regret if the home is later found to be full of problems.

Mortgage Interest Deductions (MID)
This deduction allows home owning taxpayers to reduce their taxable income by the amount paid in interest on their residential home loan. Since interest payments alone can easily be double (even triple) the sale price of the property, this deduction can be quite valuable!

In 2011, the legislature considered putting this tax benefit on the chopping block. The good news is that the deadline for action passed in November, and there is presently no proposal to limit this mortgage interest deduction.

Home Improvements
Improvements that add value to a home can be deducted. From increasing energy efficiency through improved insulation or high performance windows to installing qualifying medical improvements like wheel chair ramps, upgrading your home can pay you back with some significant tax breaks. (This doesn't apply to necessary home repairs, however.)

On the market?
Hang onto all records relating to the sale of your property, since selling costs can be deducted from any capital gains you realize from the sale. Selling costs can include agent commissions, title insurance, legal and inspection fees, even administrative and advertising costs. Some minor improvements and repairs might be considered selling costs, if performed within 90 days of the sale to increase the property's appeal. Moving costs might also be deductible.

Property Tax
Property taxes (called "real estate taxes" in some areas) are fully deductible. Take into account any city or state property tax refunds, as those will affect the total amount you can deduct.

Telecommuting Benefits
Current estimates indicate that 20 to 30 million people in the U.S. work from home at least part of the time. There are some great deductions to be had for telecommuters. Office supplies, computers, telephones, fax machines and other office equipment, including furniture, can all be deducted. So can painting or repairing the home office for upkeep. Also, calculate the appropriate percentage your home office uses of the utilities and household rent or mortgage.

Other Possible Breaks
The deduction for Private Mortgage Insurance premiums is set to expire soon, but it's been extended before, so there's a chance that benefit could continue. Various "green" technology benefits may be available. Be sure to ask your accountant about all the ways home ownership can save you big money.

Here are three ways homebuyers are self-defeating their own deals in today's market:

1. House hunting too long. As many as 60+ percent of the homes for sale in some markets are short sales. Many other listings are bank-owned (also known as real estate owned or REO) properties, and those homes tend toward two extremes: terrible condition, or so nice at such a low price they receive multiple offers.

Even the nicer, nondistressed homes on the market can end up in and out of contract over and over again due to appraisal or other lending-related issues.

As a result, it is not at all bizarre to hear homebuyers today say they've been house hunting for a year, 18 months, even two or three years. When you house hunt that long, you become susceptible to house hunt fatigue, which causes irrational overbidding out of sheer exhaustion.

Alternatively, it can cause you to settle for whatever house you can get, even if it doesn't actually meet your needs — then spend the next 10 years obsessively spending to upgrade, improve, repair and furnish the place to try to make it more like the home you actually wanted.

Both of these outcomes negate and deactivate the bargain you stood to score.

To avoid house hunting too long, it's important to get and stay clear on the differences between what you want and what you need, and to work with a local real estate professional you trust.

Look to your agent to get and keep your expectations centered in reality, so you can make more strategic decisions throughout your entire house hunt, like house hunting in a price range where you're likely to both find homes that will work for your life and be successful in your efforts to obtain one.

2. Making lowball offers way too low. Overbidding seems like an obvious way to cancel out the bargain potential of your deal. But making excessively low offers — offers sellers couldn't afford to take if they wanted to — can have the very same result.

Buyers who think they can operate strictly on the basis of buyer's market dynamics — without realizing that most sellers will need to make enough to pay off their mortgage or at least receive the fair market value for their home — are cutting off their own noses to spite their faces, all in the name of trying to score an amazing deal. This strategy almost always backfires, sellers get insulted and now the friction between buyer and seller makes it that much harder to put a deal together.

Note to "lowballers": If you don't actually secure the home, the superlow price you offered is no deal at all. And you probably lost out on a great home.

3. Freak-outs, stress, drama and mayhem. Once upon a time, buyers who were uneducated about the homebuying process tended to freak out and stress the most, especially at the top of the market. These were the folks who found themselves defeated at every turn by buyers who knew what they were up against and were prepared to make their best offer on their first offer.

Fast forward to tday's market and now the norm is for buyers to spend much more time reading up on what to expect, but the overwhelming amount of information can create brand new challenges. Constantly second guessing yourself along the way creates stress and anxiety and you will end up with the deer-in-lights syndrome unable to make any decisions at all. Make an informed decision and see it through to the end.

Almost every buyer is stressed about whether they can qualify for a loan, and about buying into a down market. Some buyers try to apply national headlines about home prices being depressed to the superlocal dynamics of their neighborhood market.

This is unwise if you happen to be, for example, trying to buy a home in a market that's in an upswing. Others go the opposite direction and deny that the basic truths about buying a short-sale listing will actually apply to them. (Attention homebuyers: buying a short sale usually takes a long, long time.)

The emotional freak-outs that result from having your expectations shattered, sometimes brutally, in the course of buying a home often lead to panic-based and fear-based decisions, which can be costly in the short and long term. Additionally, the stress itself can take a toll on your ability to be productive at work, and can even impair your relationship with your mate, neither of which are worth any deal you are trying to put together.

Again, manage your expectations by working with a trusted broker or agent you feel comfortable relying on to understand the market in your neck of the woods. Downgrading the role emotions play is essential in your real estate decision-making process.

1. Have you done your research?
A foreclosed property may have all sorts of clouds on its title, from multiple bank loans to tax and contractor's liens. Once you buy, you're responsible for all such balances. Be especially wary of the situation where one bank forecloses, but another still demands to be paid. Make sure the title company clears up these liens and is able to give you free and clear title to the property.

2. What is the condition of the property?
Try to preview the home before making the offer to purchase. Regardless, you are buying the property in "as is" condition. Always assume you're buying the value of the land and basic structures, and discount everything else. Disgruntled homeowners have been known to strip cabinets and appliances, rip out wiring and pour concrete down the drains. If you're able to get into the property, hire a home inspector to do a thorough inspection before making a bid.

3. Will you have to evict?
If the property is occupied, getting the former owners out is now your problem. An unoccupied property is often a better bet. If a formal eviction is necessary, be sure you take the cost into account. And know that evicting tenants can be destructive as well. No one wants to be kicked out of their home and often take it out on the property.

4. Can you get a loan?
Keep in mind banks are often unwilling to loan money on properties in poor condition. Moreover, many foreclosures rife with issues usually require you to pay with cash only. Given extra repair costs and other possible surprises, foreclosure purchases require an ample cash cushion.

5. What is your goal for the property?
Do you plan on buying a foreclosure and making it your primary residence? In that case make sure you have somewhere to live while repairs and updates are being made. Foreclosures often make great investments as rentals. You can get away with installing lesser expensive kitchens and baths, flooring and fixtures than if you were going to live there yourself. Keep in mind that you want to create positive cash flow (or get as close to it as possible) so don't go overboard on repairs and updates.

Foreclosures can be a great deal, but they are best pursued by those with a tolerance for hassles, knowledge of the game, and an ample checkbook. If that's not you, a non-distressed home sale or a short sale is a better option.

Replace dated hardware for a shiny new look.
Simply replacing wooden doorknobs, for instance, with gorgeous crystal knobs can add dramatic vintage appeal to bedrooms or closets. Switch nondescript drawer pulls with something sleekly modern or decidedly retro for a new look. You can find vintage hardware online or buy stylish reproductions of old hardware in many home improvement and home decor stores.

Paint small accents for a big design statement.
Painting can be a big project, but a few strategically painted accents are enough to make a huge design statement. For a surprising pop of color, paint a medallion around a ceiling fixture, or paint an old hutch a bold color and use it to brighten a dark corner. Painting furniture not only breathes new life into old, shabby pieces, but it also ties mismatched pieces together.

Swap out weary fabrics to revive a room.
If you are tired of staring at the same prints in a room, consider swapping them for pieces of tapestry. Change out picture frames too. Matching black frames might indicate a more contemporary look, while vintage frames will add charm. For inexpensive updates that add visual appeal to any room, consider a new tablecloth for a dining room table, new curtains for windows, re-covered throw pillows for sofas, and new seat cushions for chairs.

Add the unexpected.
Move a dining room chandelier to the bedroom or bring in an interesting piece of furniture to break the monotony of a matchy-match set. Make a treasured family heirloom the focal point of a room.

Show off a collection.
Don't hide beautiful china in a cupboard. Instead, place it out on a buffet or on top of a shelf where it can be seen and enjoyed. Frame your collection of vintage postcards to hang in a hallway; show off antique quilts or chenille spreads in an armoire or make a pottery collection stand out by displaying the pieces together. Collections that are part of a home's design style are easier to enjoy than collections that are haphazardly displayed.

Memorable style is all about attention to details. Visit a local bookstore and browse through the decorating books. Bring a notebook and write down the design elements that catch your eye. All the small changes you make around the home will add up to some big design changes you'll love.

There was good news about the housing market recently. In recent months, pending sales have been rising from the same month a year earlier, according to the National Association of Realtors. Pending sales are a leading indicator and the index is a measure of homebuying interest.

Unlike recorded home sales, a certain number of pending sales don't close. Even so, this is a positive sign in the midst of a volatile market.

In some areas where job growth is strong and there aren't many homes for sale, home prices are starting to rise. But at this point, these areas represent a small part of the overall housing market.

Unless you're selling in a high-demand, low-inventory market, it's risky to list your home under market value. Some sellers use this strategy to increase their chance of multiple offers and a quick sale for over the asking price.

This strategy could backfire if you are priced low and receive only one offer for the asking price or less. It's difficult to negotiate buyers up on price when they're not in competition with another buyer. So ask yourself this question. Are you prepared to accept a low bid?

On the other hand, if you know there is strong demand for a home like yours, pricing on the low side could generate enough action to get your home sold at or over the list price. But you shouldn't price lower than a price you'd be willing to accept if you receive only one offer.

As a seller you should have a good understanding of the pricing dynamics currently operating in your neighborhood before you select a list price for your home. Are listings sitting on the market for months or are they selling quickly? Are certain locations or price ranges more active than others? How does your home compare to those that sold recently? Pricing right for the market is critical to selling in today's market.

Like sellers, buyers should become price experts on the areas where they would like to buy. The Internet makes this chore a lot easier. But you'll get a better feel for valuation if you see homes that would satisfy your housing needs in person.

Don't focus on list prices. Sellers often make the mistake of listing for more than their neighbor's second-rate home. However, if the neighbor's home is priced too high, this isn't a good benchmark. Also, consider that the reasons you think your home is better may not be in sync with the way a buyer may view your home.

It's difficult for buyers and sellers to be objective about buying and selling homes. Most sellers have strong attachments to their home and have a hard time divorcing themselves from it emotionally. This can cause them to reject a good offer and later regret the decision.

Buyers can be so objective that they find it impossible to buy a house. The perfect house does not exist. Neither does the perfect deal. Compromises need to be made, but with full understanding of the pros and cons. In other words, you should make rational decisions about the price you pay and what you're willing to live with.

Knowledge of local pricing is essential for buyers in market niches that are hot compared to the rest of the market. Be sure to find out the sale price of homes that you've seen and liked or bid on and lost. This way you'll be in a better position to have a shot at winning in competition the next time.

Before you purchase a home that is located within an HOA, however, it's important that you ask questions and do your research. Not all HOAs are created equal. Some may be more lax on enforcing rules, others may have a history of poor management, and still others may be financially irresponsible.

This last issue should be a key point that you discuss with the HOA board or your real estate agent. You want an HOA that does periodic reserve studies and has plenty of money on hand for major repairs, such as refinishing a swimming pool, adding a roof to a common building, and repairing sidewalks, parks and common areas.

If an HOA runs short, meaning they haven't been charging the correct amount each month to homeowners in anticipation of these cost, they may need to do a special assessment and charge each owner a one time fee which can be quite steep.

Next, find out about your dues. HOA's charge either monthly, quarterly, or yearly dues that help pay for reserve studies, upkeep common areas, and handle any legal or legislative fees. You'll need to be sure you anticipate this cost. For condo units, this monthly fee can be hundreds if not thousands of dollars. That cost is on top of your monthly mortgage and bills and you must pay it.

Discuss the CC&R's with your real estate agent. This stands for Covenants, Conditions & Restrictions. Many HOA's don't allow certain improvements that you might want to make in the future. You might not be able to remove shrubs or trees without permission, build detached buildings, or install a swimming pool.

Find out what all you will get with this HOA. Are there certain special services like trash pick-up that they'll take care of? Do the benefits outweigh the costs?

An HOA can be a wonderful thing. It can foster community togetherness through common areas and activities. You can actually get to know your neighbors! It can help keep your neighborhood looking trim and neat for years, if not decades, to come. Just be sure to check out the ins and outs and dollars and cents of your prospective HOA before signing on the dotted line. Not all HOAs are equal and you want to find the best fitting HOA for you!