You can see that the dialogue all by itself, just written out that way, doesn't really tell us how she feels. You'd have to add gestures, facial expressions, other actions. And when you add them, you need to remember just WHAT EFFECT YOU'RE TRYING TO PRODUCE. Do you want us to sympathize with the character? Then:

"I haven't been able to leave the house - not for long, anyway - since the fire." She spoke with a flat, matter-of-fact tone.
"You had a fire?" It couldn't have been recently. I'd lived next door to her for seven years.
She shook her head, yes. "We lost everything. Pictures. Books. Furniture.
Not to mention my father." Tears welled up in her eyes and her lower lip quivered, belying the way she delivered the words.

Do you want us to hate her? Then:

"I haven't been able to leave the house - not for long, anyway - since the fire." She took another puff on her cigarette, then tossed the butt on the lawn.
"You had a fire?" I asked.
"We lost everything. Pictures. Books. Furniture. Not to mention my father." She made a sour face, as if she was well rid of him. Then she spotted a yellow convertible coming toward us. "Gotta go," she said, smiling for the first time since we'd started talking.

But there's one thing about this bit of dialogue (although it really happened) that bothers me. It's too explicit. In fiction, to be believable, DIALOGUE HAS TO BE OBLIQUE, the way conversation in real life is oblique. Too many writers, when they're inventing dialogue, spell things out completely so that it loses the air of reality.

I have a bit of dialogue in one of my stories that demonstrates that pretty well. It's a story called "A Real One" and here's the opening.

Natalie was talking to Justine, but looking past her. Nat was staring into the tack room at the stables. And she was all but licking her lips.
"Oh, come on," Justine said. "I can't believe that you are actually reduced to this. Ogling the hired help."
Nat blanched. "Sshhh," she said, stepping out of his line of sight. "He'll hear you."
"He barely speaks English," Justine told her, steering her friend in the general direction of her convertible. The work at a show barn was grueling; she didn't want Natalie chasing him away when he'd started only days before.
"I can't believe Abel leaves you here alone with him."
"Abel trusts me," Justine boasted. That Natalie's man couldn't possibly trust her was definitely implied.
"Oh, you are such an incredible prig," Nat was tucked inside her car at last. But instead of buckling her seatbelt, she took to examining herself in the rear view mirror. "How old do you think I look?" she asked.
"My God, you're serious."

The key lines, of course, come when the woman is looking at herself in the mirror and says to her friend, "How old do you think I look?" The friend doesn't say, "Too old to be thinking about seducing a man half your age," or anything explicit or explanatory. Instead, the friend says, "My God, you're serious." That IMPLIES "too old to be thinking about seducing"etc., but does not state it. And "My God, you're serious." is the way real people talk.

In this case, you also know without my saying it that these women are pretty close friends. They talk to each other in a kind of shorthand, which I fill in with narrative so the reader isn't excluded.

Let's take this:

"Did you talk to John Clark?" I asked him. He was in charge of maintenance for the building I owned, a pretty nice guy who was also handy with a wrench. He was working on his college degree three days a week and appreciated the free room the job provided.
"Nope," he said. "But I talked to his wife. She certainly complains a lot."
or "Nope," he said. "But I talked to his wife. She certainly is a good-looking woman."

Both are stiff. Listen to people, see how they condense, react, etc. Use those emendations in your dialogue.

Wouldn't this be better?

"Did you talk to John Clark?" I asked him. He was in charge of maintenance for the building I owned, a pretty nice guy who was also handy with a wrench. He was working on his college degree three days a week and appr eciated the free room the job provided.
"Nope," he said. "But I talked to her."

What you are doing is FILLING IN WITH NARRATIVE. This is crucial to writing realistic dialogue. Absolutely crucial. If you give what should be in narrative in dialogue, the dialogue is horrible.

What if the college guy said, "As you know, Ted, I'm working on my college degree three days a week." Or, "As you know, Ted, I've been in the penitentiary for armed robbery." Well, this is a bunch of baloney. Any bit of dialogue that begins AS YOU KNOW is bound to be bad. INFO DUMP is what this is called in the writing business. You have to learn to separate the information from the real talk.

I'm reading a book right now (SEA CHANGE by James Powlik) and the characters are oceanographers, so the dialogue involves a lot of narrative explanation. But the author is good at separating the two. One of his characters fires up the computer and says:

"By comparing the amplitude, frequency, and complexity of these sounds, we can begin to filter them for common components."
"Words. Language," Garner offered.
"Exactly. Which has also been done with some success."
"But no one knows what the words are." Garner had retained an interest in whale communication - biologics, as sonar operators knew them - through his own experience at Newport. He saw from Carol's expression that he had played right into her hands. "Until now?"
"Until now," she said.
(SEA CHANGE by James Powlik)

This brings up the question of INSIDER LANGUAGE. You definitely want to use it, because you want to be realistic. At the same time, you want to include the reader, to let him know what that means. Powlik did it about when Garner says "Words. Language," providing a translation, as it were, of the general term Carol uses, "common components." If she had used some insider term, the same technique would have worked.

Every profession has its linguistic shortcuts. A pilot, for instance, wouldn't say to another pilot, "There's some bad weather in Waco." He'd say, "There's some weather in Waco." The word "bad" would be implied. "He's got an attitude." That means 'bad attitude,' although it's in such common usage today, you probably wouldn't need to translate. "He's into some behavior." That means (today) bad behavior.

"He's into some behavior." He'd killed three people. Four more were in the hospital.

You can explain the first time, or maybe not explain, depending on how obvious the meaning would be. Jonathan Kellerman's character, police psychologist Alex Delaware, never says "He's taking an unmarked car." He'll say, "He's taking an unmarked." And the second time you read it, you get it. The first time it might give you pause.

On the other hand, in my horsey mysteries, I had a character say, "They have an indoor," meaning an indoor arena, and it WAS necessary to explain, at first mention, in every book, because the terminology is more arcane.

Side issues relating to dialogue include DIALECT, the attempt to orthographically transcribe a person's unique ethnic or regional way of speaking. You may think of Br'er Rabbit. Although this has a long, literary history, it's best NOT done. It's difficult for readers, and editors loathe and despise it for that reason: today's readers don't have the patience for it.

Nonetheless, some writers do it anyway. Those who do it successfully don't attempt to spell out every word with the particular pronunciation the given character uses. Instead, they SUGGEST it.

Let's see how Diane Johnson does Osella's African-American dialect in THE SHADOW KNOWS:

"I sees things," she said.
"What've you seen today, Osie?" asked I gaily; I felt happy.
"I seen Mr. Spinner in the woods once," she said. "I wasn't but seventeen or so. Me and John Henry been marrit a couple a years but I dint tell John Henry. I had done gone back there to get some crab apples, I believe. This was summertime. Mr. Spinner he a very high-suited man, spent lots of money on them fine clothes he wore. When I heard him practicin these speeches-he give them at the college fore they commencin activities - I always like to shouted myself. He had a gift..."

Which brings up something else-attribution. ATTRIBUTION is usually done simply: he said/she said. In the Diane Johnson sample, she uses a crazy inversion, (ASKED I GAILY) but that's part of the character's unique voice. You want the character to have some definite way of speaking so that his/her voice can be distinguished from that of the other characters. Everyone shouldn't sound alike.

For the most part, you don't want "she chortled" or any of the very stilted variations people use when writing dialogue. You don't need much variety. "He offered," "He questioned," "He shouted." These are all ok.

But let me backtrack a minute. Ordinarily the ADVERBIAL ATTRIBUTIONS are ALL WRONG even though Diane Johnson uses one here. "He said solemnly" will never be as effective as "His words had the cadence of dirge."

What about the phrase, AN EAR FOR DIALOGUE? Is it true that you either have it or you don't? Well, I think it's a matter of degrees. A writer like Elmore Leonard, for instance, writes brilliant dialogue and he knows it. You pick up an Elmore Leonard book and it's hugely weighted in favor of dialogue. Other books use it more sparingly. You can even pick up published books which have TERRIBLE dialogue, so NOT having an ear doesn't mean you can't be published.

Let's look here at a book called LIP SERVICE by M. J. Rose. The husband is telling his errant wife:

"What do you want from me, Julia? Histrionics? Chest beating? You want me to get as upset as you are? What will that accomplish? You're home now. You're safe. It's over. I'll take care of everything as long as you promise you'll start taking your medication and never disobey me again. All right?"

But so much for bad stuff. Let's look at Elmore Leonard, who is the master: Here's a tiny scene from PRONTO:

"I'll tell you the worst," Harry said, "was one time when I blacked out. I wake up on a plane and have no idea in the world where we're going. I'm thinking, How do I ask the stew without sounding like an idiot? I'm sitting in first class, I have just a Perrier, I don't want to take a chance, maybe black out again. I get in a conversation with the woman next to me about something. I think the movie that was coming on. I know I have to ask her. So I say right out of the blue, 'This may sound like a stupid question, but would you mind telling me where we're going?' She gives me this look and says, 'Vegas,' like, where do you think we're going."
Joyce said, "Harry, I was with you."
It stopped him for a moment. He said, "You're right, you were the woman, huh?" He said, "You were wearing your hair different then."

Well, this is wonderful dialogue. We see that Harry's a far-gone drunk (not just the passing out part, but the fact that when he isn't passed out his memory is shot) and that Joyce has a kind of disgusted no-illusions relationship with him. And we see that Harry doesn't apologize or take the blame for anything, even when he's shown to be wrong. This is their last scene as lovers. In the next scene, she's with another man and boy, and do we ever know why! That is wonderful, wonderful dialogue, and none of us in this room, myself included, can come as close to that as we'd like to.

But we can get better. We can reread the dialogue we've written and make sure it isn't too lengthy without attribution or gesture. Make sure it isn't too expository, attempting to convey information. Because AS YOU KNOW, this helps sell your fiction.