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Ask your real estate agent to pull up information on similar homes that have recently sold in the same neighborhood. (Real estate insiders call these sales comparables, or comps.) Limit your search to houses sold within the past six months that are similar in age, size, and number of bedrooms to the home you're considering. That's exactly what the lender's appraiser will look at when he determines the house's value.
Comps give you a price range for similar homes in the local real estate market. Your home should be worth somewhere between the lowest-priced and highest-price comparable. Figure out the average price of comps, and compare that to the seller's asking price. That'll give you an idea of whether the seller's asking price is too high or a bargain.
