Dear Bob: Like many families, we're having a hard time finding a home to buy that we can afford. As we have three children, we need at least three bedrooms -- and that isn't easy to find on our limited budget. But our real estate agent did find a large old house with four bedrooms. It has been extremely well maintained by an elderly couple who lived in it for 39 years. The only problem is the area is considered a slum. This is the best house in the area. If we buy it, we would have to make up out minds not to go out after dark, as the streets aren't safe in that area late at night. What do you think? Kenny M., Washington.

DEAR KENNY: Never buy a house in the worst neighborhood. Of course, if the neighborhood is being upgraded, that's a different story. Before you reject the neighborhood, check to see if there are signs of revitalization, such as painting, remodeling, and owner-occupancy. But if most of the nearby homes are non-owner occupied and poorly maintained, I would stay away from that neighborhood.

An incurable defect, such as a crime-prone neighborhood, will be a drawback while you own the house and when you want to resell it. Most neighborhoods change very slowly so don't expect overnight improvements. Keep looking elsewhere. Never buy in a bad location no matter how great the bargain may seem.

DEAR BOB: Fifteen months ago we sold our home. We planned to buy a replacement home, to qualify for the tax deferral, long before now. But financial reverses, plus illness, have resulted in near-bankrupcy. How can we file for an extension of the 18-month replacement period? Jan B., Glen Burnie.

DEAR JAN: Sorry, but you can't. The IRS does not allow time extensions of the "residence replacement rule." To defer the profit tax, you must buy a more expensive replacement principal residence within 18 months before or after the sale of your home. However, you have until 24 months after the sale to build and move into a new home. Your tax advisor has details.