As buyers prepare to move off the sidelines where they have been hanging out for the last year or two, it's time to review some basic elements of the buying process.  For the past year many buyers have thought that since we in New Jersey were in a "buyers' market," they could name their price and the sellers would accept it, since the sellers were at a disadvantage.  In fact, the fundamental laws of buying real estate still were in effect.

Those laws come down to one fact. As a buyer you can choose two of the three following characteristics: price, location and house.  The market determines the third.

A buyer's price range is generally determined by his/her qualifications and assets.  It is probably the least mutable of the three.  The variety of mortgages so common during the years 2000-2007 has pretty much decreased to a much smaller number, but financing options are once again beginning to increase.  Nevertheless, a buyer's financials are truly crucial to the process.

Location, location, location.  The old saw is still pretty much valid.  Some towns are more expensive to buy in than others, maybe for reasons of location on a commuter train line, close to a popular recreation area, or a superior school system.  If you have to or want to be in such a town, expect to pay for it.  Of course there are less attractive locations within such towns, so you may not have to rule out such a town because of cost - maybe.

There seem to be certain preferences when it comes to house style.  A 1950's ranch or 1990's condo is not as attractive to many people as a brand-new two-story detached home.  If you are seeking the last, you had better be prepared to move into a less attractive town or spend a lot more money in a more appealing location.

Let's say you are qualified for a home up to $500,000, and you want a newly-constructed two-story home.  You have "chosen" two of the three factors - price and house.  The market will determine what town you will live in, because not all communities will have the kind of home you want to live in for the price you want to pay.

If you are qualified for a home up to $500,000 and want to live in a specific, popular area, the market will determine what style of home you will buy, because that $500,000 may not be sufficient to buy the most appealing kind of home.

And, if you want to live in the most attractive town in your area, and want new construction, you may have to tap into some rich uncle in order to do it, because it may be within your budget as determined by a mortgage company.

Because the financial component is pretty much fixed, the choice comes down to what is most important to you - town or home.  Many people believe that they would rather live in new construction in a less desirable town than a resale somewhere generally viewed as more desirable.  And of course there are those who would be satisfied in any style of home in a specific, perhaps more attractive, town.  It all comes down to that compromise.

What would be your choice?