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How Much to Offer on a House

Consider these five factors when deciding how much to offer on a home.

Bella Angelos
Barbara Marquand
Chris Jennings
Updated
Figuring out how much to offer on a house is a delicate balancing act.
You never want to pay too much, but making a low bid could mean losing out on the house altogether. While there are no hard-and-fast rules, here are five important factors to consider so you can pinpoint a price likely to win over a seller without tanking your budget.
» MORE: How to make an offer on a house

1. How much can you afford?

When you're preapproved for a mortgage, the lender will estimate how much you can borrow, but that shouldn’t dictate your spending threshold. Only you can decide how much house you can afford.
The typical estimated monthly payment for first-time buyers is about $3,100, with average nationwide list prices at $412,800, according to NerdWallet's first-time home buyer affordability data (Q4 2025).
The 28/36 rule is a common affordability guideline. Aim to spend no more than 28% of your gross monthly income on housing expenses, including your mortgage, property taxes and homeowners insurance. Keep your total debt — including housing, car loans and student loans — below 36% of your income.
For a quick online estimate, use NerdWallet's home affordability calculator, which estimates how much you can spend on a house based on your income, debts, credit score, down payment and current mortgage rates.
🤓 Nerdy Tip
As you calculate your budget, remember to include ongoing housing expenses after you move in. These are an often overlooked part of how much it really costs to buy a home. Aim to set aside anywhere between 1% and 4% of the home's market value per year for repairs and maintenance, suggests Fannie Mae.
» MORE: Compare top mortgage lenders and get preapproved
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2. How much are comparable homes selling for?

Sale prices of comparable homes, or "comps," give important clues for how much to offer. Comps are homes that are similar in size, location and condition and have sold within the past several months. For example, if you're making an offer on a three-bedroom, two-bath house built in 1980, compare it with similar homes of the same age and condition in the same neighborhood.
No two homes are identical, so you'll have to adjust your offer accordingly. For example, you may want to offer more than the comp prices if the house you want has a bigger yard or a fancier kitchen than the comparable homes. Or the home may be worth less than the comps if it's in poor condition.
A good buyer's real estate agent will share a list of comps and help you interpret them to set a reasonable offer price.

3. How much should the home's condition affect your offer?

A home's asking price doesn't tell the whole story. Before making an offer, understand what the property needs and use those costs to decide how close to the asking price you're willing to go.

Move-in ready

If a home needs nothing beyond paint, fixtures or other cosmetic touches, there's less room to negotiate on condition alone. Low-end, minor renovation projects typically run under $20,000, according to NerdWallet's renovation cost data. This is modest enough that most buyers shouldn’t expect a discount. Price your offer close to asking, especially in a competitive market.

Needs one major update

A home that needs a single significant project, such as a kitchen refresh that doesn't require tearing out the existing cabinets, still carries a real cost: NerdWallet's data puts that kind of mid-range kitchen update at an average of $28,458. That's real leverage to negotiate a lower offer, seller-paid repairs or closing credits.

Needs a full renovation

Homes needing extensive work can run $15 to $150 per square foot. A major mid-range kitchen renovation — which includes replacing all appliances, cabinetry, countertops, fixtures and flooring — averages $82,793. Updating an existing 5x7 bathroom averages $26,138.
The bigger the number relative to the list price, the further it should lower your offer. Get a contractor's estimate before you submit an offer, so your number reflects the cost of finishing the home, not just buying it.
» MORE: Calculate your home renovation and repair costs

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4. Is it a buyer’s or seller’s market?

Are homes selling at, above or below the asking price and, if so, by how much? Understanding the competitive landscape is essential for deciding what to offer.

Seller’s market

In a seller’s market, demand for homes is high and supply is low. You may have to offer more than the asking price to purchase a home.
But be careful not to blow your budget to win a bidding war.
Instead, try searching for homes below your spending limit, leaving room to bid higher if necessary. And consider strategies besides offering a higher price, such as accommodating a seller's timeline for a closing date or limiting contingencies.
» MORE: How to compete with cash offers when buying a house

Buyer’s market

You have an edge in a buyer’s market because the supply of homes is greater than the demand.
Depending on the property, offering below the list price may make sense.

Balanced market

A balanced market has roughly equal numbers of buyers and properties for sale, so neither side has an upper hand. Low-ball offers are unlikely to be accepted, but bidding wars are rare. In most cases, buyers can expect to offer close to the list price, though the right offer depends on the property and whether it’s priced fairly.
» MORE: Is now a good time to buy a house?

5. How long has the house been on the market?

If a home has been on the market longer than similar properties, the seller may be more willing to negotiate. A longer listing can be a sign that the home is overpriced or hasn't attracted enough buyers.
Nationally, homes spent a median of 53 days on the market in June 2026, according to Realtor.com data. If a home you're eyeing has been listed well beyond that, it may signal fewer competing buyers and more room to negotiate.
You can find the listing date on real estate listing sites like Realtor.com or Zillow. Your agent can help you determine whether the listing history gives you room to negotiate.

How much should I actually offer?

There's no formula for setting an offer price, but you can get close by combining what you already know:
  1. Start with the price range suggested by comparable homes, or comps. 
  2. Subtract the estimated cost of any repairs or updates the home needs. 
  3. Consider the market. In a competitive market or for a newly listed home, you may need to offer at or above the asking price. If the home has been on the market for a while or you're in a buyer's market, you may have more room to negotiate.
  4. Whatever you decide to offer, don't exceed the budget you've already set.
The right offer depends on the home and the current market, but this process can help you get to a realistic starting point.

Mortgage loans from our partners

NBKC

at NBKC

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4.5
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Min. credit score

620

Min. down payment

3%

New American Funding

at New American Funding

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Min. credit score

N/A

Min. down payment

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GO Mortgage

at GO Mortgage

GO Mortgage
4.0
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Min. down payment

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COMPARE MORE LENDERS
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