Painting - What to do about removing old paint (exterior)?

I have read a lot of messages and recommendations for using a power sprayer to remove peeling paint from wood siding. 3 years ago I had to paint my house in a hurry before FHA would allow me to by my house because of peeling paint. I am sure I didn't do it correctly then, just enough to pass inspection, but now I need to paint the house because I want to sell the house. What I am getting to is this, when I used a power sprayer before it removed a good portion of the peeling paint but left the wood siding in a very rough shape (texture wise). I am leery of using a sprayer again unless I need to spray and then sand the roughness out. Even after the sprayer there was old paint still stuck to the wood that I could not get off with scraping. Will a belt sander take off all the paint or will a little paint left on the siding hurt anything?

Scrape the wood until there is no loose paint.Spot prime with an oil primer where the raw wood is exposed.Caulk as needed and topcoat.Sell your nicely painted home.