Q: When do you "settle" for second best with a house if you haven't found "the" house yet when house hunting?

A:  It sounds like you are on the search for the "perfect house".  Unfortunately, like the Loch Ness Monster and the pot of gold at the end of the rainbow, nobody has been able to prove it exists yet.  So if you're not necessarily going to find the dream house in your head, how do you choose? Try going about it this way:

1.  Think about why you're moving.  Is it for a bigger house? A better school district? Closer to work?  Think about the characteristics of a house that you aren't willing to compromise on - usually a location and a minimum number of bedrooms or bathrooms. Get a list of all properties that meet those bare-boned requirements in the location that you want to be in.  You might have a big selection like we did a few years ago, which means you can get closer to your dream home than you thought.  Or, if you're like much of the country right now, your choices are on the slim side and might be getting slimmer.  If that's the case, the reasons behind your move become more important than ever.

2. Drive by the possibilities.  Don't necessarily judge the house from the outside, but pay attention to the neighborhood and the overall location.  How's the street traffic? How's the property positioned on the lot? Sometimes online pictures don't show you the convenience store right next door, or the beautiful park across the street.  Make a note of any positives and negatives.  Only after you've driven by them should you make an appointment to check out the inside.

3.  Even if a house made the cut this far, keep in mind you're probably not going to "love" it.  Think about it - you're looking at a building where you don't have any memories of your own, and it has someone else's stuff in it.  Unless it reminds you of another place you've loved, or you share the same decorating style as the seller, there isn't an emotional trigger there for you to latch onto and fall in love with a house.  So pay attention to the things that cannot be changed (location, lot size, school district) and factor in what can be changed and the cost of doing so.  Rank the remaining ones accordingly.

So you're going to go back to your reasons for moving, approach it from a process of elimination, and keep everything in perspective. Now that you've figured out which houses out there do NOT work for you - of the ones that are left, which one is the best fit?  Make an offer on that one first, and turn it into your dream home.