DEAR BOB: I am from Europe, where we have a tradition of haggling over the price of almost everything. But I find in the United States that many people get upset if I try to bargain over prices. When I am ready to buy a house, is price haggling allowed? Jean F., Washington.

DEAR JEAN: Yes. Real Estate is one of the primary areas of the U.S. economy where prices are flexible, rather than fixed. Although we use the word "negotiation" rather than "haggling," there is extensive price and term negotiation in real estate, especially on the sales prices of older homes. t

It doesn't hurt to make a purchase offer below the asking price (unless buyer competition is very keen and you don't want to risk losing the house to another buyer). Usually, the worst that can happen is the seller will say no. Then you can come back with a better offer.

DEAR BOB: Thank you for your recent explanation of home lease options. I am a real estate agent who decided to try your idea. As a result, I got a seller to accept a lease-option offer from a young couple who couldn't qualify for a mortgage at today's high interest rates. Now they have two years to save up for a large down payment. Their income will probably increase during the option period, too. Georgia F., Washington.

DEAR GEORGIA: I'm surprised to receive a lease-option endorsement from a real estate agent. They often dislike lease options because there is usually little or no commission earned until the purchase option is exercised. But smart agents like you realize that these options are often exercised, so it's like having money in the bank for the agent. The lease option is just one of many creative finance techniques being used by progressive realty agents.

DEAR BOB: Thank you for explaining how to defer profit taxes using the residence replacement rule when we sell our home. Does this rule also apply to other property such as land and vacation homes? Jim C. Falls Church.

DEAR JIM: No. The residence replacement rule of Internal Revenue Code Section 1034 only applies to the sale of your principal residence. If you sell your primary home and buy one of equal or greater cost within 18 months before or after the sale date, you must defer paying your profit tax. But this tax break cannot be used on other types of property such as land, second homes and investment property. Your tax adviser has further information.