Question: I'm interested in purchasing a home that's priced 9 percent above others in the neighborhood. The seller feels the price is justified since they installed a lot of upgrades.

I submitted an offer that's almost 2 percent higher than the neighborhood average price, and it was rejected. The home has been on the market for 122 days, is well kept and very nice, but I cannot see how it justifies nearly a 10 percent margin in price over the average. I want to offer the sellers a fair price for the home, but not overpay. What can I do?

Answer: Real estate sale prices are established by informed buyers and sellers. If you don't want to pay the seller's price and the owner will not accept your offer, logic and reason are irrelevant -- the house won't sell and you must look elsewhere.

Don't be mislead by statistics. Upper-bracket homes, as one example, often take months to sell -- and sometimes longer.

Question: I don't have money for a very large down payment and no credit history whatsoever. I have been given a lease option to buy. However, the owners are only giving a $100 a month towards the purchase price over the two years. The entire rent is $1,700. Isn't that too little to have towards the down payment or that is normal?

Answer: People buy with nothing down, but that's not really the issue. What is the selling price of the property? If you bought it today could you afford the monthly mortgage payments? What about closing costs? How does the rent compare for properties with the same size and location?

Before going further at least go through some numbers with a lender. Also, you have credit. You can check at no cost by going to FTC.gov and pressing the "free credit report" button to the left.

Question: My husband and I bought a house in 2002 for $147,700 that was appraised at $175,000. Since 20 percent equity in the house would be $140,000 we had to pay private mortgage insurance (MI).

However since then we have worked very hard to pay on the principal to get the amount we owe below $140,000 to eliminate the insurance. Our mortgage company is telling us that since we still owe more than 80 percent of the purchase price of $147,700 we cannot cancel private mortgage insurance coverage. Are they right?

Answer: I suspect they told you something which seems related to the purchase price but is not.

Lenders make loans based on the appraised value of the home or the appraised value, whichever is less. The sale price was $147,700. For lending purposes, that's the number that counts.

In your case it appears that you bought a home with little down -- thus the need for mortgage insurance. Let's say the original loan amount was $145,000. Reduce that by 22 percent ($31,900) and when the balance reaches $113,100 the lender in most cases would be required to end MI coverage. A lender could also elect to give up the MI requirement with a smaller principal reduction, but that is a voluntary matter and not required.

Question: A real estate agent has said we can rent a brand new $610,000 home for three months at $1,500. And after that the owner of the home will co-sign to get 100 percent financing!

He says both us and the owner can sign a power of attorney that will guarantee we will own the house. He also says that we will have to pay no closing costs.

I've never purchased a home and I have not put my name on the contract because I'm skeptical. Am I right?

Answer: Do you know that the home is worth $610,000? Have you spoken with any lenders? Brokers? Appraisers? Lawyers? What is the monthly mortgage cost after three months? What about property taxes? Insurance? Repairs? Utilities? Does the agent represent the you, the owner or both? Is your income sufficient to afford a $610,000 mortgage?

Please take all paperwork to an attorney or legal clinic immediately to determine exactly how this plan works and the extent of your obligations.

Question: I'm in Florida and planning to buy land for investment. What are all the features I should look at buying land to make a good investment? How easy or difficult is it to get the property rezoned?

Answer: Raw land cannot be depreciated and unless rented it produces no income. Re-zoning in some jurisdictions can take years as well as extensive legal fees.

Unless you have considerable investment and development experience -- or assistance from appropriate lenders, brokers and lawyers -- you are likely to do much better buying real estate with established rental histories.

Question: I have heard of this $50 no appraisal option that some lenders are offering. Do you know of any lenders doing this?

Answer: This is a program available nationwide through Freddie Mac. Essentially, the guidelines say loans from lenders "may be eligible for delivery to Freddie Mac with no appraisal or inspection." Only single-unit primary residences qualify and borrowers must have a strong credit standing. For details, see any lender and ask about the "Loan Prospector No-Appraisal Option."

Question: My credit is terrible and my husband's isn't too good either. We want to buy a home but we are not sure we even would be considered. My brother-in-law just bought a home and he has $30,000 in debt. I would really like to know how he did it and how we can. We have been renting for seven years.

Answer: How do you know your credit is terrible? What would it take to make it better?

Before going further, why not sit down with a lenders or a certified housing counselor from a local community housing group to assess just where you are -- and where you need to be. There may well be loan programs open to you if you can demonstrate an evolving appreciation for good credit.

As to your brother getting a house with $30,000 in debt, that's not a barrier if he has been making full and timely payments on his obligations and has sufficient income and credit to also support a mortgage.

Question: My husband and I purchased our home 15 years ago for $77,900. We have re-financed a couple of times so we owe around $75,000. We also have a second mortgage worth $28,000. Without a formal appraisal, I am guessing our home is worth around $100,000-$110,000.

The house is over 30 years old and is in dire (I mean desperate) need of repairs and updates -- none of which we will ever be able to do without getting another loan. I would like to sell the house but we were just recently released from a Chapter 13 bankruptcy. What are the chances of actually finding a buyer for a house in our condition and what are our chances of even getting another loan given our past credit history? Are we better off staying and trying to make repairs when we can?

Answer: Your chances of finding a buyer are unknown -- but you owe $103,000 so selling the house is unlikely to get you ahead unless you can move and substantially reduce your monthly costs. In fact, given the market values you cite, you might actually need cash to close.

Would it make any sense to stay and gradually fix up the place by yourselves? Can you get help from community groups? Would a local high school like to provide some labor and undertake a neighborhood project -- it could be a good experience for the students.

Question: I bought a house in June 2004 in Nevada, I had to sell in June 2005, because I lost my job and couldn't keep it. Do I have to pay the tax on it? I lost money but just a little, please advise.

Answer: What tax? There is no federal tax on a loss. As the IRS explains , "The loss on the sale of a personal residence is a nondeductible personal loss."

Please see a tax professional for specifics.

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