I am an amateur trying to buy my first house. The one I want is overpriced and the seller will not come down far enough (I think). Here is what I did to calculate how much I should pay. Please tell me if this is a reasonable way to do this: I had my realtor determine the average price per square foot for all the houses in the neighborhood. I multiplied that by the square footage, then added 100% of the cost for updates made by the current owners. I realize that the rate of return on such updates is usually about 75%, but for the sake of argument, I gave them the full 100. When I added the updates to the price, I was still $10-15,000 below what they are asking. This is frustrating to me because today I visited a house that is 20 years newer and 600 square feet bigger, with the same price tag. Different parts of town, but both are in good neighborhoods. Is price per square foot the most important factor to consider? Should that alone disqualify the smaller house from consideration? I don't want to be a sucker. I believe I would be happy in either house, but I prefer the smaller one. This sucks. Help??