6 Mistakes Homebuyers Make With Lowball Offers - #4

Don't put limits in your 1st offer

4. Not knowing what you're willing to pay

Buyers these days have a strong motivation to get the best possible price on a property, especially if they believe that home values will fall even more, says Jay Butler, professor emeritus of real estate at the W. P. Carey School of Business at Arizona State University. Their biggest worry is often that people will say they overpaid, he says.

But sellers have limits, too, most often dictated by the amount of home equity they have, Butler says.

Before negotiations begin, it's important for a buyer to decide what his walk-away price is, Carlisle says. "At some price point, the deal is no longer worth doing, no matter how great the property."

While a buyer should know how high she is willing to go, don't put limits in the first offer. You lose integrity if you say it's your "best and final" offer, but then are willing to come up with a few thousand dollars more in order to buy the property.