Buying a home is one of the most significant financial decisions you will make in your life, and it can be a complex process. One critical aspect of this process is determining what constitutes a reasonable offer for a property.

Making an offer that is too low can offend the seller or result in a bidding war, while an offer that is too high may mean you overpay. Here’s a guide to help you navigate the process of how much should you offer on a house:

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What to Offer

A successful negotiation guarantees that the seller and buyer will be happy with the result. So, how much should you offer over or under? Let’s find out:

● 10% or Below: This is an appropriate price range if the house is in fair condition but needs cosmetic renovations. Aim for an offer more in line with the asking price if the house is ready to move into and doesn’t need any cosmetic updates. This will lessen the likelihood that a counteroffer will be needed.
● Below 20% but Above 10%: This pricing range can be appropriate if the house needs more extensive improvements because it is outdated. For instance, your offer in this category will assist with the expense of upgrading appliances and installing new flooring.
● Below 20%: This is a lowball offer, and it works best if major repairs are needed before the house can be deemed habitable. Repairs include fixing foundation problems, severe water damage, and plumbing or electrical problems.

Understanding the Market

Before making an offer, it’s essential to understand the local real estate market. Is it a buyer’s market, a seller’s market, or a balanced market? Here’s a quick breakdown:

●Buyer’s Market: There are more homes for sale than there are buyers. In this scenario, buyers have more leverage and can often negotiate better deals.
●Seller’s Market: There are more buyers than there are homes for sale. Sellers have the upper hand, and homes often sell quickly and at higher prices.
●Balanced Market: Supply and demand are relatively equal. Negotiations are typically fair, and properties sell at market value.

Components of a Reasonable Offer

A reasonable offer takes into account several factors:
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Example Scenarios

To further illustrate how much should you offer on a house, let’s consider a few scenarios:

Scenario 1: Buyer’s Market

● Listing Price: $350,000
● Comps: Similar homes sold for $340,000
● Home Condition: Good. No major repairs needed
● Time on Market: 60 days
● Seller’s Situation: Seller is moving out of state and needs to sell quickly

Offer Strategy: You have more negotiating power in a buyer’s market. Since similar homes have sold for $340,000, you might start with an offer of around $335,000, expecting to meet somewhere in the middle. Highlight your readiness to close quickly, which aligns with the seller’s urgency.

Scenario 2: Seller’s Market

● Listing Price: $450,000
● Comps: Similar homes sold for $455,000
● Home Condition: Excellent, recently renovated
● Time on Market: 10 days
● Seller’s Situation: No immediate need to sell

Offer Strategy: In a seller’s market, homes often sell quickly and for above the asking price. Given the comps and the home’s condition, you might offer $460,000 to stand out. You can include an escalation clause to increase your offer to a certain limit if other offers come in.


Before negotiating, understand the current market conditions.

In a buyer’s market, more homes are for sale than buyers, giving buyers more leverage in negotiations. On the other hand, in a seller’s market, there are more buyers than homes for sale, giving sellers the upper hand.

Here are the steps to follow when you know how much should you offer on a house:

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Review the Seller’s Counteroffer

If the seller counteroffers, carefully review their terms. They may have adjusted the price or closing date or included/excluded certain contingencies. Understand their motivations and reasons for the counteroffer.

Consult with Your Real Estate Agent

Your real estate agent is your advocate and can provide valuable insights and guidance during negotiations. They can help you understand the market, assess the seller’s counteroffer, and formulate a strategic response.

Assess Your Budget

When negotiating, consider your budget and priorities. Determine the maximum price you will pay for the house and identify any deal-breakers. Knowing your limits will help you negotiate effectively without overextending yourself financially.

Craft a Strategic Response

Craft a strategic response to the seller’s counteroffer based on your assessment. If the counteroffer is reasonable, you may accept it as-is or make minor adjustments. If the terms are unfavorable, you can counter with a revised offer that better aligns with your needs and budget.

Focus on Win-Win Solutions

Negotiations should aim for a win-win outcome where both parties feel satisfied with the deal. Avoid adopting a purely adversarial approach, as it can sour the negotiation process and make it harder to reach an agreement. Look for areas of compromise and be willing to be flexible.

Sometimes, negotiations may reach an impasse, and it’s necessary to be prepared to walk away from the deal if it no longer meets your needs. Walking away is a powerful negotiating tactic that can prompt the seller to reconsider their position or come back with a better offer.

The home buyer’s chart provides guidelines for determining reasonable offers and acknowledges that each situation is unique and may require adaptation. Buyers should be prepared to negotiate with sellers, considering factors such as market conditions, seller motivation, and property-specific considerations.

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