DEAR BOB: About a year ago a friend showed me your article about reverse mortgages for senior citizens. I sent away for more information, called Fannie Mae, talked to a local reverse-mortgage representative and thought the plan looked good. The lender's "counseling classes" made me feel I understood the choices thoroughly.

I am 74, in reasonably good health, and want to stay in my house as long as possible. But my income from Social Security, interest and dividends, plus a small pension, is barely enough. I figured that borrowing $10,000 for a new roof, plus $400 per month lifetime income from a reverse mortgage, would solve my money problems. However, in August my daughter, 44, came to visit for a week. I told her about the reverse mortgage I'm considering, and she threw a tantrum.

When she looked at the reverse-mortgage disclosure papers, she said the lender was ripping me off with the upfront loan fees. Then she phoned her brother, a lawyer, and he flew into town the next weekend. When they left, we were barely speaking. I thought they might try to have me committed to a mental hospital. They don't seem to understand that the longer a reverse mortgage is in place, the lower the effective interest rate becomes. Do you think I'm crazy to take out a reverse mortgage?--Henry G.

DEAR HENRY: No, but you discovered the biggest reverse-mortgage disadvantage: You will spend and enjoy your greedy children's inheritance.

Maybe they didn't say it, but that's what they were thinking. I don't know how much your house is worth, but a senior-citizen reverse mortgage will use your home equity as loan security. If you live to be 110, unless your home skyrockets in market value, there won't be any equity left for your adult children to inherit.

Your situation is not unusual. Mortgage lenders who originate reverse mortgages tell me their biggest problem is getting senior citizens to decide to proceed. One loan agent told me about a homeowner who took more than a year to conclude that she needed a reverse mortgage for home repairs and monthly income.

You seem well informed about reverse mortgages. Unless you expect to remain in your house at least five years, don't take out a reverse mortgage because the effective interest rate will be too high. However, the longer you stay in your home, the lower the true interest cost becomes. This was disclosed to you by the lender, I'm sure.

I think the FHA, Fannie Mae and Financial Freedom Plan (in Western states) reverse mortgages are a good deal for senior-citizen homeowners. You don't owe your children any inheritance. Enjoy your home equity; spend it.

DEAR BOB: I am a real estate agent. My buyer keeps rejecting houses that are built on concrete slab foundations, which are not raised off the ground. She thinks something is wrong with these houses. Please give me your opinion.--Bonnie F.

DEAR BONNIE: I would not buy a house on a slab foundation in an area that is subject to severe freezing weather. However, in warm climates, I have owned many rental houses on reinforced-concrete slab foundations and have not encountered any serious problems--even after earthquakes.

The one drawback I did have was when a house's water pipes were in the slab foundation and a hot-water pipe broke. My tenant called me about her very high water bills, so we easily figured out the problem, and my plumber installed replacement pipes through the ceiling. If the water or heating pipes are in the slab foundation, avoid buying such a house.

DEAR BOB: Like you, I am a landlord. Last month I ran into a new trick a tenant pulled on me that you may want to warn your landlord-readers about. My tenant gave me a written notice that he would be moving on the first of the month. That's fine. Then he asked me if he could have five extra days to move out. Because he had been an excellent tenant, and because I planned to renovate the house, I had no objection.

To my shock, he didn't move. When I started eviction on the 10th of the month, his lawyer contacted me to explain the tenant's notice to move became void when I extended the move-out and now I must give him notice to move. Meanwhile, he's living in my house free. What should I do?--Kathryn W.

DEAR KATHRYN: Run, don't walk, to your real estate lawyer's office. If your tenant has not paid rent for the current month, give the state- or city-required notice to pay rent or quit. Should the tenant continue not to pay rent, begin eviction proceedings.

The situation you described, ironically, almost happened to me recently. My 13-year "star tenant," who always paid her rent a week early, gave me a 45-day notice that she would move out on Aug. 31. Her four children were grown, so she no longer needed a four-bedroom house.

But a few days before the move-out date, her son, a professional property manager who knows all the tricks, phoned to beg me for a two-week extension because his mother's new apartment wasn't ready yet. I explained that if I granted an extension, and if she didn't move out in two weeks, that canceled her notice to vacate and I would have to give her a new notice. Because I had already sold the house, I emphasized I couldn't give a time extension. Fortunately, she moved out only a day late.

DEAR BOB: We bought our house in 1997. The title and all the papers said it was built in 1966. However, after talking with our neighbors who bought their houses new, we learned that our house was actually constructed in 1969 and that the first owners didn't move in until 1970. Two original bathroom sinks are stamp-dated November 1969, and a toilet top has the same date. Is there a way to have the construction year changed on our title?--Ben C.

DEAR BEN: Your subdivision was probably created in 1966 when the tract map was recorded. That's why the 1966 date showed up on your title report.

To determine your house's exact date of completion, visit your city or county building department. Make a photocopy of the occupancy permit if you want proof that your house was finished in 1969, even though the lot was subdivided in 1966 by the developer. Frankly, three years difference on an older house is not a big deal.

DEAR BOB: We are in the process of buying a house. Our real estate agent highly recommends we buy a one-year home warranty policy. I said this should be the seller's responsibility, but the agent said the seller refuses to pay. If we buy this policy, it will cost us $550, including extra coverage for the roof and the pool. Do you think we should buy it?--Dave R.

DEAR DAVE: Yes. I highly recommend you buy that cheap home warranty policy. If nothing goes wrong, be thankful. But if something goes bad within the next year, you'll be happy you bought it.

A similar situation happened to me when I bought my current residence. The seller refused to pay for a one-year home warranty policy, which is often provided to buyers as a sales inducement. My buyer's agent strongly suggested I pay for the policy, and I'm glad I did.

Within a few weeks after moving into my new house, I went out to the garage and found it filled with steam. The water heater had sprung a leak. I groped my way to the water heater, found the shut-off control, cut off the gas and opened the garage door.

Then I remembered my home warranty policy and found the phone number. After I explained the problem, the operator arranged for a plumber to install a new water heater the same day. When I asked if I could have a larger water heater, she said I would have to pay the additional cost, which, as I recall, was less than $100. Since then, I have highly recommended one-year warranty policies to home buyers.

DEAR BOB: We are buying our first house. About two weeks ago, we received a "good-faith estimate" of costs from our lender. A few days ago, our final loan documents were ready to be signed, and we were told to bring a certified check for our closing costs.

The amount required is about $2,600 higher than listed on the good-faith estimate. Fortunately, we can afford it, but we had hoped to use that money for other necessities. Is this unusual?--Mr. S.M.

DEAR MR. S.M.: No. Your situation is not unusual. I will receive lots of hate mail from mortgage lenders, but I must advise people not to believe the mortgage lender's good-faith cost estimate. I've bought and refinanced many properties, but never have the mortgage lender's estimates been close--or too high.

Unfortunately, there is no penalty for a mortgage lender's low estimate of mortgage costs. They know this, so they "forget" to include fees that show up on final mortgage closing papers.

DEAR BOB: Several times you have mentioned a "probate sale." What does that term mean?--Jerry G.

DEAR JERRY: A probate sale refers to real estate that's being sold due to the owner's death. In some states, probate sales are made by the estate executor or administrator. In other states, probate sales are made through the local probate court, and a judge receives bids from interested buyers and awards the property to the highest bidder.

Probate sales can provide excellent profit opportunities for buyers who are willing to put up with the sometimes unreasonable probate hassles. Once when I tried to buy a probate property, the 29 heirs could not agree on whether to accept or reject my offer. I gave up and walked away.

But I have bought other probate properties, one from a Roman Catholic priest who represented his siblings, at incredible bargains.

DEAR BOB: I have a pending home purchase. The sales contract says it is an "as is" sale and that the seller will pay for defective items if they are known prior to the closing. As the buyer, I paid for an inspection. The inspector found defective roofing, chimney, heating and some other items.

Can I force the seller to pay for these repair costs or to credit me? Or can the seller cancel the sale if he finds my demand undesirable?--Eric W.

DEAR ERIC: The situation you describe is not a true "as is" home sale. An "as is" sale means the home seller must disclose known defects, such as a leaking roof, but the seller will not pay for repairs. Any unknown defects, discovered later, become the buyer's problems.

Although your professional inspector discovered roof, chimney, heating and other defects (which presumably were not disclosed by the seller previously), in an "as is" sale you cannot force the seller to pay for repairs or to credit you for repair costs. However, if your purchase offer contained a professional inspection contingency clause, as I frequently recommend, you can cancel the home purchase. For further details, consult a local real estate attorney.

DEAR BOB: I have owned a rental house for 12 years. I want to convert it to my principal residence so I can sell and avoid taxes. But it is too small for my family and is not well kept. Selling this rental and buying another house with the sale proceeds doesn't make sense either because I will have more than $100,000 profit. Can I move into the house as my primary home, fix it up, sell it and buy a more suitable house at a higher price within a year?--Walter C.

DEAR WALTER: You are confusing rental house "apples" with primary residence "oranges." The two are not the same. Consult your tax adviser to clarify your plans.

To avoid tax on the eventual sale of your rental house, up to $250,000 ($500,000 for a married couple filing jointly), you must make it your principal residence an aggregate of two years during the five years before its sale.

You can make a Starker delayed tax-deferred exchange on the rental property for another investment or rental property of equal or greater cost if you do not receive any mortgage relief. You could later convert that acquired rental property into your principal residence, if that is your goal.

DEAR BOB: About three years ago, I was divorced. My ex-wife got the house, and since she has an excellent job (earning more than I do), she has no trouble making the mortgage payments. I am now remarried and want to buy a house with my new wife.

However, my old mortgage (more than $550,000) still shows up on my credit report, so I can't qualify for a new home loan. The mortgage company refuses to remove my name from my old mortgage, although my ex-wife makes the payments. What can I do?--Jeff R.

DEAR JEFF: There is no easy way to get your name off that old mortgage, but explain the situation to your new mortgage lender. The best ones are very understanding. Your situation occurs every day.

For example, when I refinanced my house last year, I had a similar situation because I had sold an investment property "subject to" its old mortgage, which remains in my name. But Norwest Mortgage was flexible and didn't consider that mortgage in qualifying me. I'm sure you can reach a similar accommodation with a flexible lender.

DEAR BOB: We lived in our house from 1969 to 1985 and rented it from 1992 to September 1998, when we moved back in. If we sell our house now, can we claim 50 percent of the $250,000 principal residence sale tax exemption? Also, where can we find a copy of this tax break?--Jerry M.

DEAR JERRY: Your county law library and most public libraries have a copy of Internal Revenue Code 121, which explains the $250,000 ($500,000 for married couples filing jointly) principal residence sale tax exemption. To qualify, you must have owned and occupied the house an "aggregate" of two of the past five years before the sale.

Since your one-year occupancy does not yet qualify, despite your longtime ownership, you can claim a partial exemption if the reason for your sale is related to health or employment location transfer. If the reason for your home sale doesn't meet these tests, you can't qualify for even a 50 percent capital gain tax exemption. Consult your tax adviser for details.

DEAR BOB: We recently sold our house because it was located near a freeway, and we were tired of the noise. We bought an expensive older house in what we thought was a quiet neighborhood. Now we realize our new house is under a thoroughfare for small aircraft.

Every five to 10 minutes from 7 a.m. to 8 p.m., a small, noisy plane will buzz over our heads. The seller and her agent never disclosed this to us. We moved away from the freeway, bought an expensive house in a quiet area and found out we're in an "aircraft alley." What recourse do we have?--Mark N.

DEAR MARK: Home sellers and their agents are required to disclose to buyers known material defects in the property. One California appellate court decision said this even includes disclosures about noisy neighbors.

But I am not aware of any court decisions or statutes requiring home sellers and realty agents to inform buyers about airplanes overhead. If the airplanes fly so low over your house that they take away all reasonable use, you might have an inverse condemnation cause of action against the nearby airport.

The famous U.S. Supreme Court decision in Causby v. U.S. (328 U.S. 256) awarded a chicken farmer inverse condemnation damages because airplanes landing at an adjacent airport caused his chickens to stop laying eggs. Consult a local real estate attorney for details.

DEAR BOB: My wife and I hold title to our house, but the mortgage is in her name alone. She travels extensively for work. What if something happens to her and I want to keep the house? Or, what if something happens to me and she wants to keep the house? We have no wills. Our financial situation is secure, but not our house and personal property. Should we worry?--Mr. B.E.

DEAR MR. B.E.: Yes, you should worry--but not about the mortgage. The lender won't care if your wife dies as long as the payments are kept current.

However, you need to consult an estate-planning attorney about how you hold title to your house. Is it in joint tenancy with right of survivorship? Better yet, is it held in a living trust? Your goal, when one of you dies, should be to avoid probate court costs and delays.

You both need personal wills for any assets not in your living trusts. If one of you dies without a will, the state law of intestate succession will determine who inherits your assets. Especially in second marriages, the result may not be what you want.

DEAR BOB: When I bought my condominium about five years ago, the monthly assessment fees were average for comparable nearby condos. However, since then the fees have increased almost 100 percent. My fees are far higher than those in similar condos in the area. I have talked with the management company, but all I get is the runaround.

What can I do about these constantly rising fees that seem to bring no benefits? Our parking garage is poorly maintained, and the on-site manager won't even talk to the "inmates." I don't want to sell because I like the location, view and size of my condo.--Keith V.

DEAR KEITH: When did you last attend the monthly meeting of the condo board of directors? I'll bet it has been a long time. If you're unhappy with the way the board of directors manages your homeowners association, get involved. Get your condo neighbors to attend, also.

Volunteer for committees, especially the budget and maintenance committees. Run for election to the board of directors. You have no right to complain if you aren't involved with your condo homeowner's association.

Readers with questions should write Robert J. Bruss at P.O. Box 280038, San Francisco, Calif. 94128. {copy} 1999, Tribune Media Services Inc.