When you prepare an offer to purchase a home, you already know the seller's asking price.  But what price are you going to offer and how do you come up with that figure? 

     First, you look at recent sales of similar properties to come up with a price range.  The first step in determining the price you are willing to offer is to look at the recent sales of similar homes.  These are called "comparable sales."  Comparable sales are recent sales of homes that compare closely to the one you are looking to purchase.  Specifically, you want to compare prices of homes that are similar in square footage, number of bedrooms and bathrooms, garage space, lot size, and type of construction.

     Then, you analyze additional data, such as the conditions, and the circumstances of the seller.  This will help you settle on a price you think would be fair to pay for the home.  Finally, depending on your negotiating style you adjust your "fair" price and come up with what you want to put in your offer.