Should you paint?
There are many factors involved in marketing and selling your home. You can't control most of them. The curb appeal of your home plays a big role in the sales process, and it's one of the things you can have direct control over.

You'll never get another chance to make a first impression of how your home looks from the street. If your home exterior needs new paint, potential buyers might not even get out of their car to come in and look. Putting fresh paint on your home, both on the outside and the inside, is usually the one thing you can do that pays off the fastest. You'll get more buyers looking, and they'll like what they see more, translating into a better chance for a quick offer at a higher price.   

Try to stick with light, neutral colors. These seem to resonate best with buyers.  A fresh coat of light beige on interior walls will freshen up your home and make it more marketable.  

What about a Redecorating Allowance?  

While a redecorating allowance might sound like a good idea, studies have shown that many people can not imagine what it would look like if the work were done, and tend to grossly overestimate what it would cost (and decrease what they are willing to pay for the home by this PLUS a "safety margin.")    Secondly, it is rumored that some wives do not believe that their husbands will ever get around to doing the work.  The net result is that many potential buyers will leave a house that needs work (unless they can get it at a distress price) in favor of one that has already been fixed up. 

Simply put, new paint is usually the most profitable improvement you can make when getting your home ready for sale.  So unless your paint is already in like new condition, you probably should paint.