DEAR BOB: My son and his wife bought a new home last year. The window frames are falling apart, rain leaks in the front door, and there are many other defects. The builder refuses to make any repairs. What should my son do? Mrs. J. F., Washington.

DEAR MRS. J. F.; If your son received a HOW (Home Owner's Warranty) insurance policy, he should follow the complaint procedures in it. But if no written warranty was received, consultation with an attorney is advised. You should also notify the contractor's license board, which may be able to help.

DEAR BOB: You recently recommended that a retired couple buy a house with the smallest possble down payment. In about a year, we plan to retire and move to the Sun Belt. We were planning on putting down as large a down payment on our new house as possible, thus making our monthly mortgage payments as small as possible. Please explain the fallacy of our reasoning. Mrs. Robert O., Falls Church.

DEAR MRS. O.; Elderly people can profit by tying up as little cash as possible in their homes. The rest of their cash is thus freed for other investments that produce income, such as bonds, second mortgages, Treasury bill certificates, or other alternatives.

Idle home equity money produces no cash flow. You have to sell or refinance to get income from idle real estate equities.

If you have a large home mortgage, the payments become easier to make as inflation makes each dollar worth less. Social security payments and your pension income will probably rise with inflation. But your mortgage payments remain constant (if you're smart and get a loan with a fixed interest rate).

Also, when you sell your home, the bigger its mortgage, the easier the resale.And don't forget the income tax deductions for mortgage interest.

DEAR BOB: I have a relative in another state who is a real estate agent for a national brokerage. When we sell our home, could he handle the sale from his state? If so, what would be his share of the commission if a local realty firm has a buyer? I owe my relative a big favor and hope this might help. Odtty O., Suitland.

DEAR DOTTY: Many real estate brokers belong to nationwide referral systems. If you inform your relative about your home sale, he will refer the listing to a local affiliate in your town. When your home sells, you relative will get a referral fee of about 10 percent of the commission, which he may have to split with his broker. Your relative's share might be $100 to $200, depending upon the commission amount involved.