OK, so this is supposed to be the season of good will, but if you are negotiating a price for a house, as either buyer or seller, this may not be the time to be too generous.

Price negotiations can be daunting for even the most confident buyers. 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 prepartion.

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 properites a little higher then their 'bottom-line' price, just to leave themselves room for negotiation. So be prepared to haggle. Haggling is a bit of a lost art and we only tend to do it when there are huge sums of money involved, such as when we buy a house or car. 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 that 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 yo let the seller know that 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 current house prices in the area. Keep an eye on press reports to judge whether the property market in the area is rising or falling so that you will know how long you can safely go on 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 www.nethouseprice.com, which are just two of the many sites that can show the actual prices that houses have 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 invitied to put in 'sealed bids'.

This means that each prospective buyer puts their offer in writing and the seller will then open them all at the same time. In this kind of situation, it is even more important to know your market as you will not be able to guage 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 putting in a sealed bid is to make your offer an uneven figure - try £90,153, say, instead of £90,000 - as this will reduce the likelihood of identical ones.

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