Buyer's agents represent the seller in all cases. The more you pay for the home the more the buyer and seller agents will make.
Get a real estate attorney instead to provide you with contractual advice.
While you are in love with the house, you must remain level-headed in your decision making. Think about how the real value will be determined- with an appraisal. Let's say you buy the house and in a few years you decide to refinance. An appraisal is going to use local comps (generally within two-three miles of the residence), so you need to make sure that your offer is in line with what an appraisal would value it at, not the sentimental value of the seller. If it's a proverbial "white elephant" you're going to have issues in the future, so take that into account before buying.
Your line of thinking and the suggestion below are correct: make a respectable offer using the LOCAL comps you have, don't reach too far to justify the price. If the seller won't budge you'll need to move on. There are many unreasonable sellers in this market and you may end up finding one. Good luck and keep us updated!
E Mortgage Management
800.793.9633 ext. 156
Do you already know of an agent in the area that you can trust?