This is always a difficult question to answer when it comes to the first price you are offering the seller, whether you are a first time home buyer or have a lot of experience buying a home. There is really no simple answer as there are many things you must take into consideration when making your first offer.
If the offer price is too low:
Of course, everyone wants to get the best deal for themselves, especially when dealing with something as costly as a home. As most people are financing, the lower the price, the less interest that will need to be paid over time, and that's a significant amount of money over 30 years.
However, it is wise to be cautious of offering too low of a price as this may adversely effect your chances of getting the home. Depending on the sellers experience, as well as their personality, offering too low of a price may offend them and put you out of the game altogether. On the other hand, if they are less sensitive or less experienced they may be willing to counter offer and begin the negotiation purchase.
If the offer price is too high:
No one wants to pay more for something than it's worth. However, this does happen when buyers get an emotional attachment to the home and are clouded my emotion. This can cause a buyer to pay more than you have had to if they had been thinking logically. It is a good idea to have a backup home that is just as desirable or close to as desirable as the home you are negotiating. This will give you a different perspective if the seller is trying to get more for the home than it is really worth.
You should utilize your real estate professional to supply you with statistics of recently sold homes from the MLS, or Multiple Listin Service. These statistics will give you the average "sold-to-asking" price, which is a percentage of the asking price at which homes are selling for on average. This can be used as a guidline but when it comes down to it, the decision of what to offer is completely yours.