How I Decide What To Offer On A House

One of the biggest mistakes you can make when buying a house is falling in love with it. That sounds strange coming from a real estate agent, since obviously I want you to love the house, but there's a difference between loving a house and falling in love with it. Once you fall in love, you start making emotional decisions instead of logical ones: stretching on price, overlooking something you normally wouldn't, giving something up in negotiation because you've already decided you have to have this house. Nowhere does that matter more than when it's time to figure out what you're actually willing to pay. Before I tell a buyer what I think they should offer, there are several things I want to know first.

Start With the Comps, Not the Asking Price

It's not always as simple as pulling the three most recent sales and averaging them. Sometimes the comps are strong, sometimes they're not; one house might be fully remodeled while the one you're looking at isn't, one might have a better lot or location, one might back to a busy street, one might be 300 square feet bigger but still the best comp available. There's real judgment involved in figuring out what buyers have actually been willing to pay for similar houses, which is part science and part reading the honest full picture rather than cherry-picking the sales that support a number you already like. If a home is listed at a million dollars and the comps support something closer to $950,000, that doesn't mean you automatically offer $950,000, it just gives you a starting point. The reverse happens too: sometimes the comps support more than the asking price, and I have to prepare a buyer for the house selling over asking. I don't care much about the asking price by itself, it's just a number someone picked. What matters is what buyers have actually paid for comparable homes recently, because that's the only real evidence of value either side of a negotiation can point to.

Read the Listing History

How long has it been on the market, where did it start, has the price been reduced and how many times, did it go pending and come back? All of that starts telling a story. A house that came on the market yesterday with a ton of showings doesn't call for an aggressive lowball offer just to see what happens. A house that started at a million, has sat for 75 days, and has been reduced three times down to $950,000 raises different questions: why hasn't it sold, have there been offers, where does the seller need to be? That pattern is often where the real opportunity lives.

Figure Out What's Fixable and What Isn't

When a house has been sitting, there's usually a reason: it might be overpriced, need work, sit on a busy street, have a floor plan that doesn't work, or simply have bad photos that keep buyers from seeing it in the first place. If multiple buyers have walked through and rejected it for the same reason, I want to know what that reason is. Maybe it doesn't bother my buyer at all, and that's fine, but a house backing to a freeway will still back to that freeway when it's time to sell again, and the next buyer might care even if this one doesn't. A new roof or an outdated kitchen can be priced with real numbers. A location flaw can't be fixed at any price, only accounted for in what you're willing to pay.

Look at the Alternatives Before You Commit

Buyers get tunnel vision. They find a house they love and suddenly it's the only option. Before spending a significant amount of money on any house, it's worth knowing what else that budget buys. Sometimes showing a buyer the alternatives makes them appreciate the original house more, they look around and decide they still want it, which is useful information. Other times they realize there's a comparable home two streets over for $50,000 less. I want buyers to love a house, just not so much that they stop looking at the numbers.

Understand the Seller's Situation

This is where I start calling the listing agent: why are they selling, where are they going, have they already bought something else, is the house vacant, do they need a rent-back, have there been other offers? Their loyalty is to the seller, so I don't automatically take everything at face value, but the answers still matter. I've written more about exactly how I read whether a seller might actually be willing to take less, since there are specific signals worth watching for. The goal here is figuring out what actually matters to this particular seller, because sometimes you can give a seller something important to them, like matching their preferred closing date, without it costing your buyer much at all.

Know Who You're Competing Against

This changes the entire approach. Ask the listing agent directly what kind of activity they're getting, whether they have anything in hand, and whether they're expecting more. If they tell you there's no other activity, that's useful. If they say there are three offers already with two more expected that night, that's a completely different negotiation. With no competition, there may be room to be aggressive. With several offers on the table, the conversation shifts to figuring out where your buyer is actually comfortable, since chasing the top of a bidding war and simply being willing to pay a little more than another buyer would have paid are two very different things.

Decide Your Regret Threshold

There's almost never a perfect offer. If you offer $950,000 and the seller signs immediately, you'll wonder if you could have gotten it for less. If you offer $950,000, lose the house, and later learn it sold for $951,000, you might regret not going higher. That's why I ask buyers directly, before writing an offer, whether they'd be okay watching someone else get the house for $1,000 more, or $5,000, or $10,000. I'm not trying to predict the exact lowest number a seller will accept, because nobody actually knows that. I'm trying to help a buyer land on a number where they're comfortable either way, satisfied if they win it and at peace if they don't.

Price Is Only Part of the Offer

The structure of an offer matters nearly as much as the number: the financing, the down payment, the deposit, the inspection timeline, the appraisal contingency, the closing date, whether you're asking for closing costs, whether the seller needs a rent-back. I've seen plenty of situations where the highest offer wasn't the best one, because it came with a seller credit request, weaker financing, or a closing date that didn't work. Someone offering $10,000 more but asking for a $15,000 seller credit, with shakier financing behind it, usually isn't actually the stronger offer once everything is weighed together. The goal is the strongest offer that still protects the buyer, which sometimes means paying a little more and sometimes means offering less while giving the seller a term they actually want, since every deal has its own combination of what matters most to each side.

There's no blanket rule, no matter what you read online, that a house sitting for 30 days means offering 5% under asking. It depends on the comps, the listing history, why it hasn't sold, what else is available at that price, what's going on with the seller, and who else is competing for it. Put those together and you can have a real conversation about what actually makes sense, one where you feel good about the outcome whether you win the house or watch someone else pay more than it was worth to you. I'd much rather see a buyer lose a house because someone else was willing to overpay for it than watch them win one because they got emotional and paid more than they should have. There's always another house, but there's only one number you'll actually feel good about six months later.