Clearly if the buyer offers too much money, it can be unnecessarily expensive. If the offer is unrealistically low (known as a "low-ball offer"), the seller will likely be insulted and negotiations can stall.

Remember, sellers also have their emotions invested in their homes. Upset sellers, if they make a counteroffer at all to a low-ball offer, will more often than not make a counteroffer at a higher price than they would have to a more reasonable initial offer.

Paradoxically, we have seen a number of situations where lowball offers actually resulted in the property costing the purchaser more than it would have had a more reasonable initial offer been made.

A good Realtor and common sense can guide you in making a reasonable offer that will begin negotiations with the seller on sound basis. Buying a home shouldn't be adversarial. Good will and common sense will go much farther.

The obvious first step in the process is to compare the seller's asking price with prices for similar homes in the same area. After you've seen a number of homes, you will have a good appreciation of the home's relative value. Your Realtor, working as your buyer agent can help you assess the market value of the property you are interested in.

If you are still in doubt, the buyer could pay to have the home professionally appraised. In most cases this is a prerequisite for bank financing and will ultimately need to be paid by the purchaser anyway.

However, waiting for an appraisal prior to making an offer runs the risk that another buyer could make an offer and purchase the home before the appraisal is completed.

If you are convinced that the home offers good value and is worth the asking price to you, then you should be prepared to pay full price if necessary. If other bids are coming in at the same time, you may even need to pay more than full price, particularly in a "hot market," if you are determined to get the property.

Your actual offer must be made in writing and accompanied by a deposit, or "earnest money." Your Realtor should draft the offer, and because it is a legally binding document, you may choose to have it reviewed by a lawyer. It will contain a time limit for the seller to accept, reject or negotiate your offer on the property.

The "earnest money" submitted with the written offer demonstrates that you are serious about purchasing the property. In our market area, earnest money should be more than one percent of the purchase price, but higher amounts encourage the seller and cast your offer in a more favorable light. In a situation where two buyers make the same offer, the seller often selects the buyer with the biggest deposit.

If your offer is rejected, the earnest money will be returned. If it is accepted, it becomes part of your down payment. Earnest money may be forfeited if the buyer defaults on an accepted offer and fails to proceed with the purchase.

Making a reasonable offer and offering a sufficient amount of earnest money best demonstrates your seriousness about buying the property, and encourages the seller to sell to you. A good solid offer, sufficient earnest money, and flexibility are the best tactics to pursue, and will help you get the property you really want!