DEAR BOB: I just finished reading Howard Ruff's new bestseller, "How to Prosper During the Coming Bad Years." I'm thoroughly depressed. He says that now is the time to sell city property and get out before economic chaos develops. My home, my apartment house and a small commercial property are all in the city. If Ruff is right, I could lose everything. Do you think I should sell and buy small-town property, as he suggests? George W., Washington.

DEAR GEORGE: Howard Ruff is a sincere man who believes that Carter-style inflation will ruin the nation if allowed to continue. Ruff's philosophy is defensive; he's expecting the worst. Inflation and big government are the enemy; Ruff does an excellent job of emphasizing this.

Getting down to specifies, I agree that some city properties can be bad investments. But this has always been true, especially for bad locations. If you own well-located city property, why sell? Refinance instead. Get your cash out and buy small-town investment property, just in case Ruff's prediction of forthcoming economic crisis in the cities is right.

Refinancing your mortgages produces tax-free cash. While today is not a good time to refinance, due to high mortgage interest rates, it may be wise if you can use the cash to earn more than the interest costs you. The lender is better able to handle risk than you are. Refinancing city property morgages shifts the risk from you to the lender, if Ruff is right. If he's wrong, the worst that could happen is that you would still own your city property and you would also have some small-town property, thus providing two inflation hedges.

DEAR BOB: We only know one real estate agent, the one who sold us our home. Frankly, we weren't thrilled with her service. Do you think that when we sell it in a month we should list it with her? Jackie W., Washington.

DEAR JACKIE: Mabybe. When selling any property, invite at least three active local realty agents to make listing proposals. As part of their free service, each will give you a written estimate of your home's sales price (based on recent sales of similar neighborhood homes) and explain their firm's services and fees.

Be sure to ask lots of questions. Before listing with any agent, ask for names of previous seller clients and phone those sellers to ask if they would list with that agent again. Don't necessarily select an agent just because she or he estimated the highest sales price for your home. Careful agent selection will avoid problems later.

DEAR BOB: The June issue of Money magazine says a home must be owned for five years to qualify for that $100,000 profit tax exemption. Didn't you say it was only a three-year requirement? Robert H., Hagerstown, Md.

DEAR ROBERT: Yes, Money is wrong. To qualify for the "over-55 rule" $100,000 home sale profit tax exemption, the seller must be 55 or older on the title transfer date and have owned and lived in the principal residence at least three of the five years before sale. That means if the seller has owned the home only three years and has lived in it for those three years, he or she can qualify. Your tax advisor has more details.

DEAR BOB: We are trying to find a house large enough for our seven-member family. One realtor showed us an old, run-down house that has six bedrooms. It was big enough for us, but was in such bad shape that we decided not to buy. The agent said it really wasn't listed for sale but was a "pocket listing." What does that mean? Rodney A., Springfield.

DEAR RODNEY: A pocket listing is a property that the agent knows is for sale but for which he or she has no written exclusive listing. In other words, it is an open listing where the agent earns no sales commission unless he or she finds a buyer before another agent or the seller does. Pocket listings usually involve properties whose owners are not especially anxious to sell unless they can get very high prices.

DEAR BOB: I am a real estate agent. Is it true that if my seller doesn't honor the sales agreement she signed with a buyer, I can sue her in court to force her to complete the sale and title transfer? Paula I., Rockville.

DEAR PAULA: No. As the agent, you cannot force the seller to complete the sale. But if she doesn't you are still entitled to your sales commission since you found a ready, willing and able buyer.

If your buyer wishes to, however, he or she can force the seller to honor the sales agreement. It's done by a "specific performance lawsuit" whereby the court orders the seller to deliver the title in return for the buyer's payment. Ask your attorney to explain the details of specific performance.