Dream home or dream location?

My husband and I are putting in our first bid on a home and I am a little apprehensive. It is a great home with good bones but are we paying to much for what is right now our dream home. I have always been a little frugal but to buy a home in our area you can not be. We are spending about 50,000 more to buy a home in a town 8 miles from where we saw the same home listed for 50,000 less. It is slightly upgraded but has one less bath, the expensive one is an extra acre and in the best school system( we dont have children yet). The taxes are also a little higher in the expensive one too. What would you do which house would you buy dream price or location?