DEAR BOB: My husband and I are talking about buying a home. Recently I read about home mortgage interest rates dropping a little. Do you think we should wait a few months to buy until rates drop further? Shirley T.

DEAR SHIRLEY: No. Your question is often asked. Waiting to buy a home until mortgage interest rates drop further -- if they do -- is counterproductive. When interest rates drop, more prospective buyers can afford to buy homes, thus driving up demand. Since the supply of homes for sale in most communities is inelastic, when demand increases and supply remains relatively fixed, the result is home prices go up.

To illustrate, last week I talked to a home builder who raised his prices 5 percent when Veterans Administration and Federal Housing Administration interest rates recently dropped. That is a classic economic example of what happens to home prices when mortgage interest rates decline.

Any slight saving on your mortgage payments will be eaten up by the increased price of homes available for sale. For example, a $100,000 home with a $90,000 mortgage at 10 percent fixed interest has a monthly payment of $789.81. However, if the interest rate drops to 9 percent, the monthly payment will be $724.16, a monthly payment saving of $65.65. But the price of the home will probably escalate 5 percent to 10 percent because of the greater number of prospective buyers who can afford the lower monthly payments.

DEAR BOB: My wife and I are considering buying a lot where we would build our dream home. Because I am a former carpenter, I want to be the contractor so we can save the 10 percent to 20 percent builder profit margin. I know how to deal with subcontractors and can probably save an additional 10 percent to 20 percent. However, I have talked to three banks and two S&Ls about construction loans. I've shown them the architect's plans but none will make us a loan because we don't have a general contractor. How can we get a construction loan if we decide to buy this lot? Julius R.

DEAR JULIUS: There is a very good reason the banks and S&Ls don't want to give you a construction loan. The risks of lending to do-it-yourself home builders are extremely high. From experience, construction lenders know chances are you will make a costly mistake which you can't afford to correct. Lending institutions prefer to do business with licensed contractors who know what they are doing.

You may think you are saving the home builder's profit margin by building your own home. But you'll earn every penny in the form of time spent worrying about and supervising the subcontractors. A better approach is to get bids from at least three licensed home builders. Contact their references of previous home buyers to check the quality of their work. Then award your contract to the builder with the best bid and best references. You then should have no trouble getting a construction loan when you have a licensed contractor. DEAR BOB: I just read a book by Robert G. Allen called "Nothing Down." When I followed some of his techniques, I found it isn't possible to buy a home in this area for nothing down. What do you think of his ideas and is it still possible to buy a home for nothing down? -- Ronald C. DEAR RONALD: The definition of nothing down means none of the cash to buy the home comes from the buyer. But it doesn't mean the home seller won't receive cash for the property.

Yes, it is possible to buy a home for nothing down, meaning no cash out of your pocket. For example, you can borrow the down payment from your credit union and assume an existing VA or FHA mortgage on a house. That's nothing down to you, but the seller gets all cash for his equity.

However, be very careful about buying a home for nothing down. If you tell 100 real estate agents that you want to buy a home for nothing down, 98 will laugh at you and tell you it can't be done. However, the other two have read Allen's book and will show you homes that are being sold by motivated sellers that can be bought for zero cash out of your pocket.

But I must add a warning. It's not easy to buy real estate for nothing down, although I've done it many times. So have thousand of others. The hard part is making the monthly payments. Be sure you can afford the payments before you buy any property for nothing down. DEAR BOB: We are thoroughly disgusted with real estate agents and want your advice on whether we should sue the agent who sold our land. He had been hounding us to list our property, so we told him if he could get us $125,000 he would have to add his sales commission on top. About two months later he brought us an offer for $125,000 in cash, which we accepted. But this crooked agent failed to tell us the buyer was paying $145,000 for our land. The agent got a $20,000 sales commission, which is far in excess of the customary 10 percent fee for land sales. Should we sue the agent for failing to tell us our land was worth more than $125,000? -- Carla T. DEAR CARLA: Consult your lawyer. Your situation shows why property sellers should never agree to a net listing. Such listings are illegal in some states, and for good reason.

One pitfall, as you discovered, is the agent might not tell the owner the true value of the property. As a result, the agent pockets an unusually large sales commission. But there is another, perhaps worse, pitfall of a net listing. It happens if the agent receives a purchase offer at or below the seller's net listing price. Then the agent might be tempted to lose the offer and never deliver it to the seller because the agent then receives no sales commission.

Real estate agents owe their principal, the seller, fiduciary duties of honesty, truthfulness, full disclosure and bravery. Well, maybe not bravery. But an agent who has a net listing might be tempted, as occurred in your situation, to forget to tell you that your land is worth much more than the $125,000 you thought it was worth.

DEAR BOB: Our purchase contract to buy a home said "... including all personal property belonging to the seller now on the premises." When we inspected the house there was a stove, refrigerator, dishwasher, built-in stereo and wall to wall carpets. But when we got the keys after the sale closed, the seller had removed all these items. Can we sue him? -- Judd R. DEAR JUDD: You can sue anyone. However, you may not win and there is possible legal liability for bringing a frivolous lawsuit.

The general rule is personal property is not included in a real estate sale unless the property is specifically included. Perhaps the seller didn't understand what the clause in your purchase contract means. The realty agent should have suggested itemizing all personal property to avoid any misunderstanding. But it appears you are entitled to receive all the items listed. Consult your lawyer about the advisability of suing the seller and the real estate agent. DEAR BOB: I've been following with great interest the letters in your column recently about home inspections. As a real estate agent, I've recently noticed the big changes in buyer and seller attitudes. For the last few years our brokerage firm has required sellers to fill out written disclosure forms at the time we take a listing. That has solved many potential problems of undisclosed defects. But in the last year or two, many buyers, probably after reading your excellent articles, have come to insist on professional inspections. The trouble, however, is many of these inspectors try to protect themselves by listing every possible defect that might remotely be wrong with a house. Just last week one inspector wrote on his report for a one-year-old house in tip-top condition: "This house appears to be in excellent condition, but it is too early to tell what defects may develop in future years." As a result of stupid inspectors' remarks like that, about six months ago our brokerage firm began offering our listings "as is" without warranty or guaranty, but buyers may have any professional inspections made within five days and cancel the purchase within that time. What do you think of this idea? -- Damon L. DEAR DAMON: I think that is an excellent way to handle this growing problem of the over-zealous home inspectors who not only try to find defects but, at the same time, also try to protect themselves from any liability for missing a defect.

Home buyers should realize the perfect home doesn't exist. Every home has some defects. The idea of written seller disclosure statements is to inform the buyer of any known defects so the buyer won't be surprised. As a real estate agent, you get caught in the middle between the seller and the buyer.

Your firm's policy of offering your listed homes "as is" without warranty or representation, but disclosing all known defects and allowing the buyer a five-day "free-look" period, seems excellent. I might suggest that at the time you take the listing, you or the seller order a termite inspection report if it is customary in your area. Then the seller won't be surprised by extensive termite or other structural damage that should be repaired by the seller. Consult your lawyer for further details. DEAR BOB: Several months ago you told another reader she can force her mortgage lender to cancel the PMI {private mortgage insurance} if the loan-to-value ratio is less than 80 percent and if Freddie Mac or Fannie Mae owns the loan. Our home is worth at least $150,000 and the mortgage balance is about $105,000, which is about 70 percent. I wrote our S&L to ask them to cancel our PMI. But I got back a real nasty letter saying their policy is not to allow PMI cancellation until the loan balance drops to 75 percent of the original purchase price. That means our loan will have to decline to $90,000 before we can cancel our PMI. The S&L says it still owns our mortgage. Do we have any recourse? Ursella L.

DEAR URSELLA: I regret to report that unless Freddie Mac or Fannie Mae own the mortgage, there is no way I know of to force a nasty lender to drop your PMI, which is obviously a waste of money since you have about $45,000 of home equity. Perhaps if you contact the lender's president and keep doing so to make a pest of yourself, he will agree to cancel the PMI to get rid of you.

Readers with questions should write Bruss directly at P.O. Box 6710, San Francisco, Calif., 94101.