Some factors that affect the price of a property are demand in the area, the reason for sale, and property condition. The best thing that you can do to give yourself the upper hand in the negotiation process is to do your research and be able to make an informed offer.
While you may have an indication of price from the listing or the estate agent, look into comparable property sales in the area and how much the property may have sold for in the past. You should also find out how long it has been on the market for, if it has been on for a long time, perhaps the asking price is too high or there are issues with the property? Consider why the owners are selling. If they are in a rush e.g. moving overseas, they may be more room for negotiating a good deal to offload the property quickly. A need for repair work could also be a justification for making a lower offer.
In short, the more you know, the better position you are in. Do your research!
Before you enter the negotiation process, you should have an idea in your mind of what you are realistically willing to pay and what your budget ceiling for a particular property is. Don't go into the process with your maximum price, or you will have no room for negotiations, but do be wary that in seller's markets, you may need to go close to beat off competition from other buyers. Do not pluck a number out of the air and go in with a ludicrously low offer either, remember that you are negotiating in good faith, and you don't want to jeopardise your position as a potential buyer. Emphasise qualities which make you appealing, for example, if you are paying in cash, a first-home buyer, or have already sold your home, a seller will be more interested in your offer, as the completion process will be more likely to go through.
Get a survey
Buying a property is an inherently emotional decision, you have to love what you are purchasing. But at the same time, it is important that you think objectively. You should invest in a professional survey, which is a chance to identify any faults with the property and may give you leverage for a price reduction or even make you reconsider buying it altogether. In addition, find out whether there is likely to be any major work required in the near future e.g. windows that need replacing, leaky shower tiles etc. as these can be a nasty shock to the wallet if not budgeted for in advance.
Once your offer has been accepted, ask the estate agent to take the house off the market. The reason for this, is that the seller could accept a higher offer from another buyer (known as 'gazumping') which although poor etiquette, is completely legal in England and Wales. Sometimes you can choose to pay a non-refundable deposit to lock in the sale, to prevent this practice.
At this point, you will also need to formally apply for your mortgage and instruct your solicitor to begin the conveyancing process. Remember that nothing is set in stone until the contract has been signed, jump through these hoops, exchange contracts, pay the deposit (usually 10% of the purchase price), and you become the legal owner of your new home. Congratulations!