You have to offer what you are comfortable paying for a home. But to help you determine the fair market value contact a professional realtor. They can run an analysis for you to see what similar homes in age, and sq. footage have sold for in the last 90 days and also what the percentage is of sales price to list price (example : sales prices are averaging 84% of list price). At that point it is up to you to make the final decision with what you are comfortable offering knowing of course that the seller can accept, reject or counter and then it is up to you whether to move forward if they counter. Hope this helps.