When I walk around my Lake Zurich neighborhood, it's evident that there are many young families living here. There are skateboard ramps and sidewalk chalk on the driveways. I notice a bike, baseball bat, jump rope, or Barbie discarded by a child in pursuit of other fun things to do. Sometimes you can even see through the window that the living or dining room has been converted into a playroom by a young family. I love these signs of life; actually they make me a little nostalgic since my own boys have long outgrown the toys of their youth. But when you are selling your house? Not so much.
Staging your house for sale when you have children is difficult, especially in today's housing market when the house may take months to sell. You can't put everything away and expect that your children simply won't play for the next several months. In fact, you should do everything you can to ease the transition by keeping your family routine as normal as possible. 
That being said, you do need to convert the living or dining room from playroom back into well, a living or dining room. Your prospective buyer needs to see the intended purpose of the room. You need to organize the toy clutter and try to confine it to one or two places within the house. The skateboard ramp needs to be moved into the garage, and while sidewalk chalk is charming, it's not so charming in the photographs that are intended to showcase your home at its very best. Try to keep toys out of the front yard, off sidewalks and away from the front porch. Simply put, you need your home to appeal to every potential buyer. Your buyer may be single or married, young or older, with children or without. If your potential buyers can't envision themselves living in the house because they don't have children and there are toys on every available surface, they will likely move on to the organized, toy free house that feels more like home to them.
Moving is hard on grown-ups, so you can imagine how hard it can be for your children. If you have young children, I've created a Kid's Listing Book for you to share with them. It helps explain what happens when we list your home and what they can expect in an easy-to-understand manner. I also ask your children to help me sell your home by making their beds in the morning, picking up their toys, turning on the lights before a showing, helping Mom and Dad keep the house tidy, and letting me know if we run out of flyers. I let them know that if they help me sell their home, they will "earn" a special surprise to thank them for all of their "hard work." This helps to get them involved in the process and takes away some of the fear and anxiety they may experience. Plus, they (usually!) love to help keep the house tidy when they know they will get a special reward when the house sells.
Stay tuned for Part 2, where I discuss moving with children from an emotional standpoint and how you can help them transition to their new home.
Kelly - I have given parents McDonalds coupons as incentives for kids to keep their rooms nice and neat.