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Making an offer on a home can feel like trying to solve a complex puzzle. Studying market conditions and comparable sales can take some of the guesswork out of the process.

#6: Solve the puzzle of how much to offer.

How much to offer for a home is the ultimate homebuying conundrum. There's just no way to know in advance if you are offering more than necessary, or so little that the seller will get teed off or choose another offer. Many buyers feel that they're just taking a shot in the dark on one of the most important decisions they will ever make. Here are a set of factors you absolutely must consider when deciding how much to offer for your target property:

• Comparative Market Analysis (CMA). Ask your Realtor to prepare an analysis of similar, nearby homes that are active, pending, or recently sold or expired from the market. Pay attention to the difference between list price and sales price, and also to the average number of days the pending and sold properties were on the market prior to contract. Ask your Realtor what offer price or price range they would recommend, based on this data, and to explain their rationale.

• Seller's situation. How many days has this particular home been on the market, compared with the sold and pending properties in your CMA? Compare this property's condition and aesthetic appeal with the neighboring comparables, too.

  Ask your Realtor to check in with the listing agent. What is the seller's situation? Is the seller a bank or an individual? Why are they selling, and what is their time frame or motivation level? Are you the only offer on the table? If not, how many others are there?

• Market factors. How many similar homes are on the market? Is it a strong buyer's market, seller's market, or neutral -- in your area and your price range, not on the national news! Is it Springtime, when many other buyers are looking to buy, or the holiday season, when very few homebuyers are bundling up to house hunt. What are standard negotiating practices in your area? Ask your Realtor whether a lot of back and forth in counteroffers is normal, or whether few or no counteroffers is more the norm.

• Your situation. What are the mortgage payments corresponding with the beginning and end of the price range recommended by your Realtor? How much can you afford to come up with in down payment and closing costs, and what purchase price corresponds with your available cash to close? Finally, how badly do you want the place? Will you be heartbroken if you lowball the sellers and don't get the place? Or is this the sort of place you will kick yourself for losing unless you make your highest and best offer?

NEXT: #5: Get the right Realtor >>

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