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How Much Should I Offer on a House? A Data-Driven Guide (2026)

•offer.guide Team

How Much Should I Offer on a House? A Data-Driven Guide (2026)

📚 Part of the Making Offers Series:

Making an offer on a house is one of the most stressful decisions in the homebuying process. Offer too low and you might lose your dream home. Offer too high and you could overpay by tens of thousands of dollars.

So how do you know what to offer?

This guide will walk you through a data-driven approach to calculating your offer, backed by market analysis and negotiation strategy. Before you dive in, make sure you understand the complete offer process so you know where pricing fits into your overall strategy.

The Three Numbers You Need to Know

Before making an offer, you need to understand three key numbers:

1. List Price

This is what the seller is asking. But it's just a starting point, not the "right" price. In fact, deciding whether to offer asking price depends entirely on market conditions and property value.

2. Fair Market Value

This is what the house is actually worth based on recent comparable sales and property condition. This should be your baseline. We cover the complete methodology for calculating fair market value in our dedicated guide.

3. Your Competitive Offer

This is what you might need to offer if there are multiple bidders or if you really love the property.

Step 1: Research Comparable Sales (Comps)

The foundation of any good offer is understanding what similar homes have sold for recently.

How to find comps:

  • Look for homes within 0.5 miles
  • Sold in the last 3-6 months
  • Similar size (within 200 sqft)
  • Similar bed/bath count
  • Similar condition and age

What to look for:

  • Sale price
  • Price per square foot
  • Days on market
  • Any price reductions

Example: If three comparable homes sold for $460K, $475K, and $490K, the average is $475K. That's your starting baseline.

Step 2: Adjust for Property Condition

Here's where most buyers make mistakes: they compare sale prices without accounting for condition differences.

Common adjustments:

Roof (10-20 year lifespan)

  • Needs replacement: -$12,000 to -$20,000
  • Needs repairs: -$3,000 to -$8,000
  • Recently replaced: No adjustment or slight premium

HVAC (15-20 year lifespan)

  • Needs replacement: -$8,000 to -$15,000
  • Aging but functional: -$3,000 to -$6,000
  • New system: No adjustment or slight premium

Kitchen/Bathrooms

  • Outdated (15+ years): -$10,000 to -$25,000 per room
  • Needs cosmetic updates: -$5,000 to -$10,000
  • Recently renovated: +$10,000 to +$30,000

Flooring

  • Needs complete replacement: -$5,000 to -$15,000
  • Minor repairs needed: -$2,000 to -$5,000

Foundation/Structure

  • Major issues: -$20,000+ (or walk away)
  • Minor cracks: -$3,000 to -$8,000

Example calculation:

  • Comp average: $475,000
  • Property needs new roof: -$15,000
  • Kitchen is outdated: -$12,000
  • Flooring needs work: -$6,000
  • Adjusted fair value: $442,000

Step 3: Factor in Market Conditions

Market temperature matters. A lot.

Hot Market (Seller's Market)

Signs:

  • Properties sell in under 10 days
  • Multiple offers are common
  • Prices trending up month-over-month

Strategy:

  • Offer at or above fair value
  • Consider waiving contingencies (carefully)
  • Add escalation clause
  • Include personal letter

Balanced Market

Signs:

  • Properties sell in 15-30 days
  • Some negotiation happens
  • Prices relatively stable

Strategy:

  • Start at fair value
  • Standard contingencies
  • Negotiate repairs after inspection
  • Room for back-and-forth

Cold Market (Buyer's Market)

Signs:

  • Properties sit for 45+ days
  • Price reductions common
  • Inventory is high

Strategy:

  • Start 5-10% below fair value
  • Include all contingencies
  • Request seller credits for repairs
  • Don't be afraid to walk away

Step 4: Consider Days on Market

How long has this property been listed? This is your negotiation leverage.

0-14 days: Fresh listing, seller has options

  • Offer at or near fair value

15-30 days: Normal timeframe, some urgency building

  • Offer at fair value or 2-3% below

31-60 days: Seller is motivated

  • Start 5-7% below fair value

60+ days: Seller is desperate

  • Start 10-15% below fair value
  • Point to days on market in your offer letter

Step 5: Calculate Your Offer Range

Now let's put it all together with a real example.

Property Details:

  • List price: $525,000
  • Comparable sales average: $515,000
  • Needs new roof: -$15,000
  • Kitchen outdated: -$12,000
  • Flooring needs work: -$8,000
  • Days on market: 18 (balanced market)

Calculation:

  • Start with comps: $515,000
  • Subtract repairs: -$35,000
  • Fair Market Value: $480,000

Your offer range:

  • Conservative offer (if not in love): $470,000
  • Fair value offer (standard): $480,000
  • Competitive offer (multiple bids): $495,000
  • Walk-away price: $510,000

Step 6: Your Negotiation Strategy

Initial Offer

Start at fair value ($480K in our example) and include:

  • Earnest money deposit (1-2% of offer)
  • Inspection contingency
  • Financing contingency
  • Appraisal contingency
  • Request seller credit for major repairs

Response to Counteroffer

If seller counters at $500K:

  • Counter back at $490K
  • Emphasize documented repair needs
  • Stand firm on contingencies
  • This is your negotiating range

If seller counters at $510K:

  • Counter at $495K-$500K max
  • This is your walk-away zone
  • Don't exceed unless you truly love it

If seller accepts $480K:

  • Congratulations! Great deal.
  • Move to inspection phase
  • Stay vigilant for additional issues

Walk-Away Signals

Don't be afraid to walk away if:

  • Seller won't budge and price exceeds fair value by 10%+
  • Inspection reveals $50K+ in surprise repairs
  • Seller refuses to address major safety issues
  • Your gut tells you something's wrong
  • Appraisal comes in significantly below offer

Common Mistakes to Avoid

1. Falling in Love Before Making an Offer

Emotion clouds judgment. Stay analytical.

2. Ignoring Repair Costs

That "small" roof issue is $15K. Factor it in.

3. Not Getting an Inspection

Even on new builds. Always inspect.

4. Waiving All Contingencies in Hot Markets

Protect yourself. At minimum, keep inspection contingency.

5. Making Your First Offer Your Best Offer

Leave room to negotiate. Start lower.

6. Comparing List Prices Instead of Sale Prices

List prices are dreams. Sale prices are reality.

The Faster Way: Use offer.guide

Doing all this math manually takes hours. That's why we built offer.guide.

In 5 minutes, you get:

  • Fair market value calculation
  • Competitive offer recommendation
  • Repair cost adjustments
  • Complete negotiation strategy
  • Walk-away price guidance

How it works:

  1. Paste the property listing URL
  2. Answer 9 questions about condition and market
  3. Get your personalized offer recommendation

Your first assessment is completely free.

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Frequently Asked Questions

Should I always offer below asking price?

Not always. In hot markets or for fairly-priced homes in great condition, offering at or above asking may be necessary. Use comparable sales as your guide, not the list price. Learn more about when to offer asking price.

How much below asking price can I offer?

In a balanced or cold market, 5-10% below asking is reasonable if the property has been on the market for 30+ days or needs significant repairs. Always base your offer on fair market value, not list price.

What if I'm competing with other offers?

In multiple offer situations, you may need to offer 3-5% above fair value. But don't abandon your walk-away price. There will always be other houses.

When should I use an escalation clause?

Escalation clauses automatically increase your offer by a set amount (e.g., $2,000) above competing offers, up to a maximum. Use these in hot markets when you expect competition, but set your maximum carefully.

How do I know if I'm overpaying?

If your offer exceeds comparable sales by more than 10% after accounting for condition differences, you're likely overpaying. Stick to your data-driven analysis. This is exactly why running your own offer analysis is so important.

Should I include a personal letter with my offer?

Personal letters can help in competitive situations, especially with sellers who are emotionally attached to their home. Keep it genuine and brief—mention what you love about the home and why it's perfect for your family.

Next Steps

Now you have a framework for calculating your offer. Here's what to do next:

  1. Research comps in the neighborhood
  2. Assess property condition during your walkthrough
  3. Calculate fair market value using the formula above
  4. Determine your offer range (fair value, competitive, walk-away)
  5. Develop your negotiation strategy
  6. Make your offer with confidence

Or skip the spreadsheets and let offer.guide do the calculation for you in 5 minutes.

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Conclusion

Knowing how much to offer on a house doesn't have to be stressful. With the right data, proper condition assessment, and a solid negotiation strategy, you can make confident offers that protect your wallet while giving you a fair chance of winning.

Remember: the best offer isn't always the highest. It's the one backed by data, tailored to the property's actual condition, and aligned with your financial goals.

Happy house hunting!

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