Price negotiations can be daunting for even the most confident homebuyers. Bid too high, and you could end up paying over the odds, but bid too low and you could end up losing your dream house.

Although there are no hard and fast rules, you can make the process a bit easier by doing some preparation and keeping your cool.

With property prices still holding their own, many would say it is a sellers' market, especially in the London area.

But sellers will still often price their properties a little higher than their 'bottom-line' price, just to leave themselves a little room for negotiation - so be prepared to haggle.

For most of us, haggling is only something we do for souvenirs on holiday. But trying to strike a bargain when there are huge sums at stake can be a different proposition, and many people find the process a bit intimidating.

So before you put in your first offer, it's best to do a bit of homework to make sure you get your pitch just right, and give you the best chance of success.

First of all, work out how much you have to spend, and don't be seduced into offering more than you can afford.

If you have already organised a mortgage, then that may put you in a better bidding position than someone who is still waiting, especially if you let the seller know you will be in a position to proceed as soon as the offer is accepted.

Once you know how much you can afford, do some research on prices in the area. Keep an eye on press reports to judge whether the property market in the area is rising or falling so you will know how low you can safely go with your first offer.

It is also possible to find out how much similar properties in the area have sold for in recent months.

Try visiting www.myhouseprice.com or you could try nethouseprices.com which are just two of the may sites that can show the actual prices that houses have been sold for, just by putting in the postcode.

When you're ready to make your offer, it will usually be done through the estate agent. They will tell the seller your price, and then let you know whether it has been accepted or rejected.

Depending on the market, your first offer could be as low as ten per cent less than the asking price, although if the market is rising it is very unlikely that an offer under the asking price will be accepted, especially if it is a desirable property.

Sometimes, if there are several people interested in the same property, they will be invited to put in sealed bids'. This means each prospective buyer puts their offer in writing, and the seller will open them all at the same time.

In this situation, it is even more important to know your market, as you will not be able to gauge the seller's position by putting in lower bids as it is likely that a competitor will put in a higher one.

One good tip for making a sealed bid is to make your offer an uneven figure as this reduces the likelihood of identical offers.

Making your offer is just the start of the process, but if you have done your research, you should end up paying a fair price and can look forward to owning the home of your dreams.