DEAR BOB: I have had my home on the market for about six weeks. I have advertised it every day and hold open houses each Saturday and Sunday. I know my home is priced reasonably because I am asking less than a similar home listed in the next block.

I estimate about 25 prospective buyers and about 10 real estate brokers have inspected my house so far, but I have not received any offers.

What should I do to get my home sold quickly? -- George P.

DEAR GEORGE: You missed most of the fall selling season for homes. Now we are entering the slowest time of the year for home sales, between Thanksgiving and New Year's. Even the best real estate agents have difficulty selling homes during this time of the year when few people want to move.

If you are a regular reader of this column, then you know I do not advocate selling your home alone without a professional real estate agent. The risk is too high that you will make a costly mistake.

Not being able to obtain a purchase offer from one of those 25 prospects has already cost you extra mortgage, property tax and maintenance expenses. Perhaps your home is overpriced or it has other drawbacks that prospective buyers don't like. You only have one home to sell, but the local realty agents can show buyers hundreds of homes for sale through the local multiple listing service.

I suggest you bite the bullet and list your home for sale with your town's best real estate agent.

Ask your friends, neighbors and business associates for recommendations. Interview at least three agents who sell homes in your neighborhood. Each will give you their listing presentation, which should include a "comparative market analysis." This form shows recent sales prices of similar homes and listing prices of neighborhood homes, which are your competition. It will also show the agent's estimate of your home's market value.

But before listing your home with an agent, ask each agent for a list of their most recent home sales with the names and phone numbers of the sellers. Then call those people to inquire if they were in any way unhappy with their agent and if they would list their home with the same agent again. You will soon know which agent should get your listing.

DEAR BOB: I own a large apartment building in good condition. However, it is in a bad part of town where there have recently been several arson fires. It has been listed for sale over six months with an excellent realty broker who specializes in apartment building sales. The broker has been very successful with buildings in better locations. Frankly, I wouldn't buy my building because of its rough location. Any idea how to get rid of this property? -- Maida P.

DEAR MAIDA: Just as lease-options almost always work to sell houses, an offer to exchange will usually work to sell commercial property. Ask your agent to run a newspaper classified ad for a month headed "Will Trade." You will get some interesting exchange offers, usually from people who are building their estates by trading up to larger properties.

Since you will be trading down, you may acquire a property that will be easier to sell than your current building. Or perhaps you will want to keep the property you acquire. For details on the tax benefits of exchanging, consult your tax adviser.

DEAR BOB: On my 1989 income tax returns I showed a loss of about $38,000 for a commercial building I own. Most of this was a paper loss for the depreciation deduction.

Since I could only deduct the maximum $25,000 annual passive loss and have to waste the $13,000 balance, can I reduce my depreciation deduction on my 1990 tax returns to save it for future tax years? -- John R.

DEAR JOHN: Sorry, but the government does not allow you to adjust your depreciation deduction each year according to whether you can benefit from it on your income tax return. Once you begin depreciating your commercial property over 31.5 years on a straight-line basis, you are locked in to that depreciation rate.

However, you can save up any unused tax losses above your $25,000 annual limit and use those losses to offset profits when you eventually sell your property. Consult your tax adviser for further details.

DEAR BOB: We own a three-bedroom, one-bathroom home in a nice neighborhood where the schools are excellent. Our problem is we have three children and our home is too crowded now that and each wants a private bedroom.

We have looked at larger homes, but they seem so expensive in our school district. The larger new homes are far out in the boondocks and the schools there are overcrowded, so we have ruled out a new house.

Our alternative is to add a bedroom, bathroom and family room on to our present home. But we realize the construction would be very inconvenient and the cost estimates seem so high.

If we add on to our present home, any suggestions on the best way to finance the improvements? -- Marty H.

DEAR MARTY: Perhaps you've noticed the boom in home remodeling. Many other homeowners have come to the same conclusion -- that it is usually best to remodel and add on to a home than to buy a larger one. Since you like the location and school district of your current home, I agree you will be making a wise decision to upgrade it.

Yes, there will be considerable inconvenience during construction. But an experienced and thoughtful contractor can minimize the disruptions.

Be sure to get bids and client references from at least three remodeling contractors. Don't necessarily go for the lowest bid. Check the quality of their work and talk to their previous customers to see what they liked best and least about each contractor.

As for financing the construction, you can either use a home equity loan or refinance your current mortgage with a new first mortgage after the work is completed. The cheapest and easiest finance choice is usually to obtain a home equity credit line to finance construction.

After the work is finished, you can decide if you want to refinance the first mortgage with a new one, possibly at a lower interest rate.

DEAR BOB: We are considering buying a home where we can assume the existing first mortgage and the seller will carry back a large second mortgage. However, the seller insists the second mortgage have a balloon payment due in 10 years. Do you think this is dangerous? -- Emmy H.

DEAR EMMY: No. A 10-year balloon payment is perfectly safe. By then you will probably either have enough equity in the house to refinance the first mortgage or perhaps you will have sold the home.

Incidentally, if you think you might sell the home within 10 years, it would be a good idea to make that second mortgage assumable, thereby increasing the saleability of the home. To be certain the second mortgage is assumable, be sure it doesn't contain a due-on-sale clause. For further details, consult an attorney.

DEAR BOB: I have been an absentee landlord for the last nine years. A neighbor was supposed to be looking after my house for me and selecting good tenants, but she didn't do a good job and the last tenants trashed the place. Since I live about 400 miles away, I have decided to sell.

Do you think I should fix up the house, at a cost of about $5,000, or should I sell it in its present badly run-down condition? -- Herman T.

DEAR HERMAN: Fix it up. A run-down house appeals to few prospective home buyers, mostly bargain-hunters like me who expect a purchase price far below the market value of a house in good condition.

DEAR BOB: We are in the process of trying to buy a house. If it weren't such a bargain, we wouldn't put up with the impossible seller and the equally difficult real estate agent.

The trouble is the seller doesn't seem to have clear title. Years ago, she apparently deeded a partial interest in the house to a man who loaned her some money. Instead of taking a mortgage, he got a 25 percent interest in the house. She claims he was paid back many years ago. But his name is still on the title and he can't be located. Any ideas? -- Julius P.

DEAR JULIUS: I am surprised the title insurance company has not suggested that the seller, through a real estate attorney, bring a quiet title lawsuit. Such an action will determine if the absent co-owner has any ownership interest in the property. In the meantime, perhaps you can work out a rental arrangement with the seller so you can occupy the house with the rent applying toward the purchase price.

DEAR BOB: Almost a year ago, we bought a new home from a small builder who recently declared Chapter 7 bankruptcy. We should have known there was trouble when he failed to take care of problems, such as a cracked garage floor slab, doors that don't close properly, plumbing trouble and circuit breakers that frequently go off even though there is no overload.

Is there some type of builder's trust fund that will help pay for repairs to our home? -- Rudie P.

DEAR RUDIE: If you obtained a 10-year warranty policy from a third-party new home warranty company, such as Home Owner's Warranty Corporation, then the warranty company is responsible for your home repairs when the builder goes broke.

However, if you did not insist on such warranty protection, then your only recourse is to get in line with all the builder's other creditors and file a claim with the bankruptcy court. It is shocking how often home builders file bankruptcy to get out of taking care of their obligations.

Even many of the major builders form a separate corporation for each new subdivision, and when that project is finished they either fold the corporation or put it into bankruptcy. Either way, the builder can escape liability for continuing obligations, such as repairing defects in new homes. For further details, consult your attorney.

DEAR BOB: Because of an illness and unemployment, we are unable to make the payments on our condominium. The mortgage balance is about what the condo is worth. We have tried to sell it, but the complex is badly built so nobody will buy. Our lender has offered to take a deed in lieu of foreclosure. Is there anything we should be wary about? -- Sherry H.

DEAR SHERRY: Yes. Before you give the lender a deed in lieu of foreclosure, be sure the lender gives you a written release of liability and a promise not to report the problem to the credit bureaus.

Since you have paid the mortgage in full by deeding the property to the lender, you are entitled to such consideration from the lender. By signing the deed to the lender, you are saving the lender thousands of dollars in costs, so, in return, the lender owes you some favors too.

DEAR BOB: I recently read a magazine article that said about 50 percent of adjustable-rate mortgage lenders are charging the wrong interest rates.

How can I calculate the interest rate on my ARM to see if my lender is right or wrong? -- Ted S.

DEAR TED: Get out your ARM loan documents to learn the index used and the margin percentage. For example, suppose your ARM uses the popular 11th District Cost of Funds Index and your loan has a 2 percent margin. As I write, 8.09 is the cost of funds index, so adding 2 percent would produce a current 10.09 percent interest rate.

However, the problems on most ARMs occur if your loan has a maximum annual interest rate increase, but the index increases faster than your interest rate can increase.

To illustrate, suppose in the next year the Cost of Funds Index goes up 2 percent, but your ARM allows only a 1 percent maximum increase and then the next year the index drops 2 percent. According to the terms of most ARMs, the unused 1 percent increase can be added by the lender in the second year even though the index was then decreasing. I think you can see the mess ARMs can create for lenders and borrowers.

DEAR BOB: I am considering buying a large run-down home. The seller is asking $175,000, but the house is only assessed for $92,500. Is there any rule of thumb as to how property tax assessments relate to a property's true market value? -- Penny L.

DEAR PENNY: No. In most communities the property tax assessment has no relationship to a property's fair market value. A possible exception occurs where the property is reassessed shortly after it is sold.

Valuing an old house in bad condition can be very difficult. You may want to hire a professional appraiser recommended by your bank or other local lender. Or you can talk with several local real estate agents familiar with the neighborhood to get their opinions of the home's market value.

DEAR BOB: I am 78 and undecided what to do with my house when I move to a retirement home after Christmas. My late husband and I bought our home many years ago for only about $10,000. Today it is worth over $200,000.

My son and his family would like to move in when I move out. If I sell it to them I could use that "over 55" $125,000 tax exemption you often discuss. But I really don't need the money and am thinking of giving the house to my son and his wife.

However, I wonder if they might get a divorce, because they have only been married a few years and sometimes they don't get along too well. Do you think a gift of the house to them is a good idea? -- Janice K.

DEAR JANICE: No. When real estate is given away, the donee takes over the donor's basis. Although I realize your $10,000 initial basis has probably increased because of capital improvements and stepped up when your husband died, your son and daughter-in-law will have a below-market basis if you give them the house now. This will raise their tax liability when they sell the house.

A better alternative is to let them inherit the house when you die. Then they will receive a new basis stepped up to market value on the date of your death. In the meantime, you can let them live in the house in return for paying the expenses. This choice also solves another possible problem in case they should get divorced before you die. For further details, consult your tax adviser or attorney. Readers with questions should write Bruss directly at P.O. Box 280038, San Francisco, Calif. 94128.

1990, Tribune Media Services Inc.