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NEW YORK (CNN/Money) - My husband and I are planning to move back home to Ohio from suburban Maryland, where we own a house that we figure has increased in value by $200,000 or so. Our plan is to buy a cheaper house in Ohio (which shouldn't be a problem given the difference in real estate prices between Maryland and Ohio) so I can work fewer hours a week and spend more time taking care of our infant daughter.

How do we maximize the profit we will make from the sale of our Maryland house and minimize the capital gains taxes we will have to pay?

-- Rebecca, Brunswick, Maryland

I like the way you and your husband think. Sell in an expensive market and buy in a cheaper one. The old "arbitrage the housing markets" ploy.

Alas, we all can't do this. If we tried, the increased demand for low-cost houses would jack up their prices, making them expensive. But for people like you and our husband who have the opportunity, this is a great way to take advantage of the real estate boom.

You're really looking for advice in two different areas. The first essentially boils down to how to get the best sales price for your current house, while the second is how do you pay as little tax as possible on any profit from that sale.

On the issue of getting the best sales price, the first question you've got to decide is whether to go with a real estate agent or go FSBO, or "Fizzbo" as it's known -- For Sale By Owner. By selling your house yourself you get to keep the commission you would normally pay the real estate agent -- it's still usually 6 percent, although these days it could range as low as 1 or 2 percent.

But, of course, you've got to be able to do the things a real estate agent would normally do for you -- that is, develop a plan for listing, advertising, marketing and showing the house, and then making sure your buyer is qualified and able to come up with a mortgage. That requires quite a bit of effort and commitment, which is why the vast majority of sellers opt to go with an agent, even if it's one of the new breed of discount brokers.

Whichever way you go on this issue, your single most important task is setting the right price. Clearly, you don't want to go with too low a price and give up potential profits. But you also want to take care not to price it too high for your area.

You might think that overpricing your home isn't much of a risk given today's hot real estate market. After all, if you set the price too high, you can always lower it and your house will immediately be snapped up, right?

Not necessarily. Houses generate the most interest in the first couple of weeks they're on the market. If you turn off potential buyers during that time, you may have trouble generating interest later on even after a price reduction. Indeed, some house hunters might think the fact that you've come down in price is an indication of some underlying problem with the property.

So check out what similar houses with comparable features have been selling for in your area, get an idea of how quickly houses have been selling and then settle on a price that makes sense given the dynamics of your market.

You also want to make sure your house is ready for sale -- that is, attractive, and presentable. Start on the outside by making sure landscaping is trim and the lawn is cut. It's not unknown for potential buyers to drive up to a house they plan on touring, and then keep on driving because the house and grounds look like they've been neglected.

And while you certainly don't want to be putting big bucks into your home right before sale, spending a couple hundred bucks or so to tend to cosmetic details like peeling paint or sagging ceiling plaster or just spending some time to clear out junk and tchotchkes to give the place a more streamlined and spacious feel can go a long way toward increasing the sales price. For more tips on making your house more sellable, click here.

As for minimizing any capital gains tax on any profit you make on the sale, I don't think you're going to worry about that at all. Home-sale profits of up to $250,000 for individuals and up to $500,000 for married couples are not taxed, provided you meet two tests: the ownership test and the use test.

To do so, during the five-year periods that ends with the date you sell the home, you must have owned the house for at least two years and you must have lived in it as your principal residence for at least two years.

And even your profit puts you and your husband over the $500,000 limit, there may still be a way to escape taxes. If you've spent money on permanent improvements to your home such as adding a new bedroom, you would deduct those amounts from the profit. If that doesn't put you below the $500,000 gain exclusion, it would at least reduce the amount of the gain, as well as the tax.

For more details -- and believe me, there are plenty more -- on how to qualify for the home-sale gain exclusion and which projects qualify as permanent improvements, check out IRS Publication 523: Selling Your Home, which is available at the IRS Web site.

Sounds like you and your husband have a good plan to create a nice little life for yourselves in Ohio. So get that Maryland home on the market while real estate prices are still booming, and turn the plan into reality.

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For more tips on selling or buying a home, click here.

Click here for more on the "mansionization" of America.

Walter Updegrave is a senior editor at MONEY Magazine and is the author of "We're Not in Kansas Anymore: Strategies for Retiring Rich in a Totally Changed World."