The list price on a home is a starting point set by the seller and their agent — not a fixed fact about the home's value. A well-reasoned offer usually comes from looking at comparable sales ("comps"): recent sale prices of similar homes nearby, in similar condition, size, and age. Your agent will typically prepare a comparative market analysis to help you see this picture clearly.
Broader market conditions matter too. In a seller's market — where demand outpaces available inventory — homes often sell at or above list price, sometimes with multiple competing offers. In a buyer's market, there's more room to negotiate below list price. Your agent can tell you, based on real, current local data, which kind of market you're in for a specific home and area — this shifts by neighborhood and even by season, so it's worth asking fresh each time, not assuming.
Offer price is only one term in a broader offer — earnest money amount, option/inspection period length, closing date, financing terms, and any requested seller concessions all move together as a package. A slightly lower price with a clean, flexible offer can sometimes be more appealing to a seller than a higher price loaded with contingencies, and vice versa depending on what the seller needs.
It's worth deciding, before you fall for a specific home, what your real ceiling is — the number where you'd genuinely rather walk away than stretch further — and sharing that clearly with your agent. Bidding wars can create pressure to move past a number that made sense on paper; having decided your limit in advance, while calm, is one of the most useful things a buyer can do for themselves.
None of this replaces your agent's direct, local guidance — market data changes street by street and month by month, and a licensed agent working that specific area in real time is the best source for what a competitive, sensible offer looks like on any given home.