Hey, sellers! Did you know that even after your home is “sold”, the deal could fall apart because of a “revealing” home inspection?

Once a home goes under contract, it’s typical for the home buyer to send a professional home inspector to review the fixtures, plumbing, and physical structure of your home for defects.

And, because most sales contracts contain a provision for a “satisfactory appraisal”, the buyer can walk away from the deal if the home inspection reveals problems and defects that can’t (or won’t) be fixed.

Defects may include any one of the following:

• Moisture or mold in garage
• Cracked roofing tiles
• Leaking sink fixtures
• Defective sump pump
• Dangerous levels of radon and/or carbon monoxide gas

Of course, there are more.

The list can be exhaustive and, unfortunately, the seller doesn’t often find out that the defects exist in his home until a buyer performs an inspection. He thinks, “Well, I lived here with no problem. What’s the big deal?”

Compounding the problem is that — at this point in the home sale process — the seller typically feels that he’s sold his home for too little and the buyer typically feels that he’s bought the home for too much.

As a result, neither side wants to pay for the repairs and this works in favor of the buyers who can always “rip up” the contract.

As a home seller, it usually makes sense to have your home inspected prior to listing it for sale. This way, you can be aware of problems and have them fixed before a buyer inspects the home for himself.

Having a pre-listing home inspection can reduce the chances of a buyer walking away from a sales contract because of inspection issues (which can also double as the perfect “cover” for a severe case of cold feet).

In his weekly syndicated column, Kenneth Harney pulled back the curtain on a nasty piece of IRS tax code that can penalize homeowners with foreclosures and short sales.

Because the IRS treats canceled debt as ordinary income, homeowners that “work something out” with their lender may inadvertently add tens of thousands of dollars to their annual tax liability.

According to the tax code, when a creditor agrees to cancel a personal debt of $600 or more, it is required to submit a 1099-C, Cancellation of Debt form to the IRS. And, when the IRS receives this form, it treats the canceled debt as income.

So, if your mortgage lender agrees to “forgive” $40,000 on your mortgage in a short sale, you are required to report that $40,000 as income to the IRS — even though you never physically held the $40,000.

This is how a person’s tax liability can dramatically increase. Imagine if you were taxed on $40,000 that you never “earned”.

Capitol Hill is taking steps to offer relief to homeowners by modifying the tax code related to cancellation of debt.

The Mortgage Cancellation Tax Relief Act of 2007 would amend the tax code to forgive debt cancellations on primary residences and is currently before the House Ways and Means Committee, the primary tax legislation body of Congress.

Relocate-America.com selected Asheville, NC as their #1 city in the annual report “America’s Top 100 Places To Live”. This is the second time that the mid-size city of 70,000 ranked in the list’s Top 10, compiled since 1998.

Rounding out the rest of the Top 10:

1. Asheville, NC
2. Traverse City, MI
3. Ithaca, NY
4. Chicago, IL
5. Cary, NC
6. Portland, ME
7. San Francisco,CA
8. Stevens Point, WI
9. O’Fallon, MO
10. Spencer, IA

You can view this year’s complete list at http://top100.relocate-america.com/.

If you want your home to feel larger and more spacious but don’t want to plan a new addition, consider how light can impact your perception of space.

The best approach may be to start from the outside-in. Literally.

A feeling of spaciousness is not just about openness and “room”, but also about light that comes from outside your home.

Assess your home for its ability to capture sunlight. The more light in a room, the larger it can feel. Bigger windows are one way to improve the natural light of a room. More light-forgiving window treatments is another, as are new doors that feature transoms to allow more light to pass through.

And don’t forget to clean them!

The next step is to add lighting. Instead of floor lamps, consider adding ceiling-mounted lights. A light fixture works fine, but a series of recessed lights or track lighting work better.

The object is to have more complete light coverage in all areas of your home because it can make a small home feel as large as the big outdoors.

And lastly, consider putting a fresh coat of paint on your walls to increase the perception of space. Light-reflecting colors such as whites, beiges, and light grays can also make a room feel larger.

For a lot of homeowners, “Spring Cleaning” is an annual ritual. If you are one of them, are you doing it right?

Leave it to Martha Stewart whose Spring Cleaning tips should help you put your cleanest foot forward.

A few choice tips from her exaustive (and exhausting) list:

• Vacuum and flip mattresses
• Launder all curtains and fabric shades
• Perform a safety check on fire alarms and carbon monoxide detectors
• Recaulk windows

For the ambitious, be sure to download the entire nine-page checklist in PDF format. Wow.

As foreclosures increase around the country, an opportunity arises for home buyers willing to take a chance.

Foreclosed home are typically sold auction-style and are awarded to the highest bidder.

This is a different situation from the usual real estate transaction, and requires a lot of homework in order to avoid over-paying.

Foreclosures are a terrific way to find a “fixer-upper”, but don’t expect to get a steal.

Houses sold in foreclosure are not a “secret”. At any given auction, there are hosts of “professional buyers” in addition to investors and contractors in the crowd.

If you are a novice, these folks will have much more experience than you in buying foreclosed properties and that can put you at a disadvantage.

If you bid and are awarded a home, however, remember that foreclosed homes are sold as-is. If the home has strange quirks and or has hidden issues, that’s too bad for the buyer.

Foreclosed homes are sold without warranties or guarantees an a buyer must be prepared for the worst.

There are plenty of good values at foreclosure auctions, but it may sometimes be less expensive to buy a home the “traditional way”. At least in that scenario, there is room for negotiation with the seller.