DEAR BOB: Since the sales market in our neighborhood is excellent, my wife and I are thinking about selling our home, probably in January or February. Should we hire an appraiser? Or is the estimated market value from a real estate agent sufficient? We are considering listing with a young, enthusiastic agent, but should we instead list with an older agent who gave us his brochure from a well-known nationwide brokerage? Also, how are commissions split in case a buyer's agent locates a buyer for our home?--Harold S.

DEAR HAROLD: You probably don't need to hire a professional appraiser unless your home is unusual or in an area where there haven't been many recent home sales. However, you should interview at least three successful real estate agents who sell homes in your vicinity. The reason to interview three or more agents is to cross-check their evaluations of your home's market value.

If you only interview one agent, he or she might "low-ball" your home's market value. That means the agent will estimate a low valuation, hoping for a quick, easy sale. However, when you interview three or more agents, watch out for an agent who "high-balls" your home's value, hoping you will list with him or her because of the high sales price.

Each agent interviewed should give you a written comparative market analysis (CMA). This form documents each agent's opinion of your home's market value, based on recent sales prices of comparable nearby homes. It also shows the listing prices of similar neighborhood houses currently for sale, as well as the asking prices of recently expired comparable home listings.

As for listing with the young, enthusiastic agent or the "old pro," interview both. If you select the new agent, he or she may have a lot of time and energy to devote to your listing. Be sure he or she works in a brokerage office where the manager carefully supervises the new agent. The "old pro," on the other hand, offers many years of home sales experience.

Don't list with a "numbers agent," who has many listings and who won't have the time to devote to your sale. Also, check the client references of each agent's previous sellers to find out if they were unhappy with the agent and if they would list their house for sale with the same agent again.

Be certain your listing will be promptly entered into the local multiple-listing service (MLS) to give it the widest market exposure so all member agents and their buyers will have details.

When your house sells, the entire sales commission goes to the listing agent's brokerage office. If the buyer is represented by an agent, often called a "buyer's agent," that brokerage office will then usually receive 50 percent of the gross commission. Then each brokerage office splits the commission with the listing and selling agents. Your listing agent and the buyer's agent could each receive as little as 25 percent of the gross sales commission.

DEAR BOB: About a year ago, I sold my hard-to-sell condominium and carried back a 10-year mortgage. The buyer pays me and I make the payments on the old first mortgage. The buyer pays the property taxes and condo association fees. Since I carried back my mortgage, I have been contacted by many firms who want to buy it. If I sell, who should I pick? Have you written on this topic?--Mr. R.F.

DEAR MR. Those investors who want to buy your mortgage invest in discounted mortgages. That is a profitable business, but don't expect to sell your mortgage for its face amount. The investors want to purchase for less, to raise their yield.

To illustrate, suppose you carried back a $50,000 second mortgage at 8 percent interest for 10 years. Your description indicates you carried back a "wraparound mortgage," which includes payments on the existing first mortgage. That was smart, but it makes analyzing your mortgage difficult. Since most investors want higher than 8 percent yield on their invested dollars, in this example, they might offer you $40,000 cash to raise their yield. Or, they might offer to buy just the monthly payments, and you will get the $50,000 balloon payment in 10 years. If you don't need cash, however, don't sell.

DEAR BOB: I just got a new mortgage and moved into my condominium last week. My mortgage payments start Dec. 1. Another company offered me a better job. If I change jobs, how will it affect my loan and relationship with my lender?--Nikolay B.

DEAR NIKOLAY: You got your mortgage. Feel free to change jobs. Your mortgage lender doesn't care, as long as you make your mortgage payments on time, of course. You don't even have to inform your mortgage lender that you got a better job.

DEAR BOB: My husband and I own two one-week vacation time shares. We no longer want one week in Colorado. We listed it with a broker for more than a year without a sale. The time share association is in direct competition, selling foreclosed weeks for only $100 to $300. Our broker, recommended by the association, wants a $1,000 commission, and we know of no other sales agent. Since we don't want a foreclosure and just want to get rid of this time share, can we quit-claim our time share to the association?--Hedy S.

DEAR HEDY: I've said many times that time shares are advance purchases of vacation time, not real estate investments. But I receive so many time share complaint letters like yours, occasionally I run one to show the many pitfalls.

Contact your time share association to learn its policy on foreclosures. I presume you still owe money on your time share purchase. Find out if the association will accept a quit-claim deed without reporting the matter to any credit bureau. Also, check with your lender to find out if there will be an adverse credit report if you sign a deed in lieu of foreclosure. Get everything in writing to avoid misunderstandings.

DEAR BOB: I own my house, which is worth about $275,000. I would like to add my two single adult children to the title to prevent inheritance tax and probate costs. I went to a lawyer, who is a former judge of the probate court. She said my children will have to pay a gift tax, but I am not giving the house to them now. I only want to add their names for survivorship, and I don't consider that a gift. What should I do?--Loraine M.

DEAR LORAINE: Unless you own total net assets exceeding $650,000 (increasing to $675,000 in 2000), there will be no federal estate or gift tax when you die. Therefore, adding your adult children to your home's title, presumably as joint tenants with right of survivorship to avoid probate, should not create a federal gift tax unless you have given away lifetime assets exceeding $650,000; however, a gift tax return should be filed.

A better alternative might be to create a revocable living trust so you can continue managing your assets while you are alive and competent. A living trust avoids probate costs and delays when you die. More important, if you become incompetent, then your living trust successor trustee, such as one or both of those children, takes over management of your assets.

DEAR BOB: My son recently completed military service and accepted a well-paying position. He wants to buy a house, but has no cash and no credit history. No lender will grant him a conventional, no-points mortgage at current interest rates.

If he buys the house and if our lawyer draws up a 30-year mortgage for me to carry the full purchase price at 7.5 percent interest, am I vulnerable to being challenged by the IRS for making a gift of the purchase price? The benefit to me is the monthly payments will be higher than the return on U.S. Treasury bills, which are my current investment.--Frank D.

DEAR FRANK: I'm surprised your son didn't apply for a no-down-payment VA mortgage to buy that residential property. However, since the "Bank of Dad" is willing to finance his mortgage, that's better for both of you.

Lending money to a relative when the mortgage is secured by real estate is not considered a gift. You will receive an excellent 7.5 percent return, and your son will be able to deduct the mortgage interest and property taxes on his income tax return. It's win-win for everyone.

DEAR BOB: If I decide to sell my house without a professional agent, what legal papers, such as a sales contract, do I need to avoid legal problems with the sale? Also, several of our friends have sold their houses at auction. What are the advantages and disadvantages of that?--John McC.

DEAR JOHN: Along with preparing a legally binding sales contract, you will need to give the buyer a written disclosure of the home's defects to avoid a potential buyer lawsuit for nondisclosure of material defects. In addition, you must give the buyer disclosures regarding lead-based paint and possible flooding. Local jurisdictions often require additional seller disclosures, such as for natural hazards, radon, energy efficiency and building-code compliance.

Before deciding to sell your house alone, interview at least three successful realty agents who sell houses in your vicinity. Each agent should prepare a written comparative market analysis showing his opinion of your home's market value, based on recent sales prices of similar neighborhood houses. You should ask each agent about all the paperwork involved in a home sale. Real estate agents enjoy giving you their listing presentations because they know most do-it-yourself home sellers fail and, after about 30 days, decide to list with a professional agent.

As for auctioning your house, there really aren't any advantages for sellers. Buyers bid at auctions because they think they can buy a bargain house below its true market value. Auctions are often used for distress sales, such as foreclosures. Rarely do auctions bring top dollar.

DEAR BOB: My wife and I will be living in Europe for about two years. We want to rent our house to tenants while we're gone. We've talked with several real estate agents about finding tenants, screening them, collecting rents and handling repairs, but they want fees of 10 percent to 15 percent of the gross rent, plus a leasing commission of 5 percent of a year's rent. These fees seem high. Are they standard?--Louis B.

DEAR LOUIS: There is no such thing as a "standard fee" for property management of a single-family house. Bear in mind that managing your rental house is not going to be profitable for the real estate agent. Many real estate brokerages have rental departments because those rental properties often eventually come up for sale and the broker then usually gets the listing.

More important than the management fee is the success record of the property manager. Ask for references from landlords of other rental houses the firm manages. Phone those owners to inquire if they are satisfied with the management and if they recommend the property manager.

DEAR BOB: A few weeks ago, you ran a letter from a real estate agent who explained why some agents advise their home sellers to price the house below market value, hoping to stir up buyer interest so the bidding goes above market value. You said deliberately pricing a house below the price a seller is willing to accept is dishonest. I commend you for taking that stand.

As a prospective buyer in an active market, I find it disgusting when agents at Sunday open houses advise offering more than the asking price. My wife and I have refused to get involved in such dirty tricks. Although it took us about three months, we bought a wonderful house, which the seller priced right about market value and for which we offered slightly less. The seller accepted because ours was a "clean offer" with no contingency clauses. Keep up your good work informing real estate consumers what's going on out there.--Raymond R.

DEAR RAYMOND: I've received a lot of letters about the tactic of underpricing houses in active or "hot" markets in the hope that prospective buyers will bid the sale price above what the house would ordinarily bring. A few readers said underpricing is a negotiation tactic that is fair, but most think underpricing is a misleading negotiation strategy.

Buying a house is difficult enough without sellers and their agents setting low prices that sellers aren't willing to accept. Recently, I saw a buyer strategy that I thought was fair to both buyer and seller. The buyer proposed an all-cash purchase offer that would be $5,000 more than any other serious buyer's written offer to the seller. Obviously, that buyer really wanted to purchase that house.

DEAR BOB: When I sold a small strip shopping center a few years ago, I never questioned the way my accountant reported the sale on my income tax returns. I had almost fully depreciated the building on my tax returns but, of course, not the land value.

Until this year, I didn't know that I had paid capital gains tax on the entire sale price, including depreciation recapture on the improvements and the land value. I feel my accountant erred in including the $90,000 land value in the total sale, making me pay capital gains tax on the $90,000, as if it had been depreciated. Does the statute of frauds apply in this situation?

--Harry N.

DEAR HARRY: I think you are referring to the statute of limitations. The statute of frauds requires certain contracts, such as real estate listings, sales and leases, to be in writing to be enforceable. But the statute of limitations for correcting an erroneous income tax return is generally three years from the date of filing or date the tax return was due.

I suggest you review the transaction with another tax adviser to see if your investment property sale was correctly reported on your tax returns. If not, file an amended tax return and seek a refund. However, if the three-year statute of limitations for claiming a tax refund has expired, you may have recourse against your accountant for malpractice. Consult your attorney about that.

DEAR BOB: I wish you would warn buyers about the pros and cons of buying a house in a designated historic district. We get two types of buyers in our historic area. One is thrilled to learn his historic house is in a protected area. That person usually joins the neighborhood association on the spot.

The other is the "stucco lover," who plans to revitalize the "old house" with stucco and vinyl windows. The buyer gets upset when I walk onto the site and say to stop ripping out windows until the city inspector arrives. I feel sorry for such people because the seller and real estate agent didn't tell them about the historic protections. This has happened twice on my block in the past six months. Please warn people about buying in a designated historic district.--Carol McC.

DEAR CAROL: Many cities have historic districts where building modifications require special permits. You are correct that sellers and their realty agents should notify buyers in advance so they are aware of the protections in these neighborhoods.

DEAR BOB: My name is quite common and, as a result, my credit report contains incorrect information of others who have a similar name. My attorney suggests that I use all three of my names when applying for credit to avoid a mix-up. I have notified the three credit card companies where I do business, but I want to clear up my credit reports. How do I go about doing this, as I plan to buy a house in early 2000?--John A.

DEAR JOHN: Congratulations on clearing up your credit reports before applying for a home mortgage! By the way, before shopping for a house, be sure to get pre-approved, not just pre-qualified, for a mortgage so you will know what price-range home you can afford and the maximum mortgage available to you.

Here is the latest information I have on the three major credit bureaus:

* Trans Union, P.O. Box 403, Springfield, Pa., 19064-0390; phone 1-800-888-4213;

* Experian, P.O. Box 2104, Allen, Tex., 75013; phone 1-888-397-3742;

* Equifax, P.O. Box 740241, Atlanta, Ga., 30374; phone 1-800-997-2493;

If you've been turned down for credit within the past 60 days, are unemployed or were rejected for employment due to credit-report information, you are entitled to a free credit report; otherwise, you will be charged a fee by each firm. After receiving your credit reports, study them closely and notify each credit bureau of any mistakes, requesting a corrected report within 30 days. Follow up. Correcting credit reports often takes several letters.

DEAR BOB: I recently bought a house. As you often recommend, I included a contingency clause for a professional inspection in my purchase offer. My buyer's agent recommended an inspector, whom I paid $300. I accompanied him, as you suggest, and learned that several items that looked serious were insignificant. However, he failed to discover that the main beam in the attic is bowed and could break from the weight of three layers of roof shingles.

This was later pointed out to me by a contractor whom I hired to convert the attic into a home office. When I confronted the inspector, he apologized and said he got distracted, failing to notice the bowed beam and too many layers of heavy roof shingles. Do I have any recourse against him? In the future, how can I find a competent home inspector?--Lynn R.

DEAR LYNN: Only a few states lightly regulate home inspectors. Unfortunately, real estate agents often recommend inspectors who are not "deal killers" and who are known for not pointing out serious defects. After reading all the disclaimers on the inspection reports, it is difficult to sue professional inspectors if they miss an important item. However, even I would know that three layers of roof shingles are usually too heavy and can lead to sagging or broken beams. In some cities, it is illegal to have more than two roof layers.

In my opinion, the best protection for home buyers is to hire professionals who are members of the American Society of Home Inspectors. They are usually listed in phone book Yellow Pages under "real estate inspections" or a similar heading. ASHI members must complete many inspections and pass an exam before being accepted for membership.

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