Biting off more than you can chew
You have done your homework and know what price range you need to stay in. The very first house that your realtor shows you is $80,000 over your budget and it's everything that you could ever dream for. First of all, you have just stepped outside of your plan in exchange for pizzazz. Realtors are going to get the largest sale possible and always start high, hoping you will go up and the buyer will come down. If you throw in the towel on the very first house, you are doomed to an over-extended mortgage and in two months when you are eating another can of pork and beans for dinner, your home won't seem quite so attractive.
Save, save, save
This has always been the rule of thumb in purchasing real estate even though we got off track for a few years. 20% is a nice figure to have saved back for your down payment on a home. Anything less becomes a liability to the financial institution for the first couple of years should you just walk away. They also know that the more you have at stake, the more likely you are to stay in the property. 20% of $100,000 is $20,000; that sounds like a lot of money and it is. But if you don't save it now, you will be paying it later on the end of the mortgage and at a much higher interest rate by placing less money down.
Determine your piece of the pie
Literally, draw a circle that looks like a pie and turn your expenses into pieces of the pie. What most lenders like to see is 62% income and 38% expense. If your expenses are in order, you can realistically look at spending 3X your yearly income on a house. If your expenses are higher than 38%, you would probably be ahead to work them down or consider a cheaper home.
Who says you can't shop?
I'm sure that your realtor does have a very good mortgage company or lender in mind that he/she can steer you toward but kindly decline and do your own shopping. This does not have to be the painful experience that everyone expects. If you have a good down payment, if you have a good debt to income ratio and if you have a decent credit score, companies will compete for your business before telling you that an application process has to be completed before they can share details.
Remember, the harder you work at your final goal the more you will appreciate the end results.