DECIDE HOW MUCH YOU'RE WILLING TO PAY.

Not how much the home you like is priced.  Not how much of a discount you feel you should get... or should "deserve" in today's market.

Hopefully you've been out home hunting before you found this "one" that you want to buy.  You know how much other homes were selling for.  You know how much the homes that were much nicer than this one, were listed for.

And hopefully, you also know how much some of the "closed" for.  That should give you a good sense of what this one is worth.

Your friends, your family, your boss will all tell you, that in today's market you shouldn't pay any more than 84% of their list price (or some other low percentage number that they've pulled out of the most recent article in the Tribune).  But they haven't been out in the market looking at moldy, decrepit homes... you have.  They haven't seen homes that were priced higher than you thought was reasonable, sell out from under you on the first or second day.

Compare this home to the ones you've seen on the market.  Ask your Realtor to give you a CMA (Comparative Market Analysis) of what s/he feels this property's true market value is.  Base your decision of "how much we're willing to pay" on that.

Then, if you're ready, go after it.