A cigar-chomping realtor was driving around a young couple to search for their first dream house. After listening to their concerns about mortgage points, maintenance costs, and school systems, he decided to give them a bit of advice. "I've been selling homes for 23 years," he said, "and I've discovered only three things matter when you're buying a home: location, location, location."

To prove his point, he drove the couple to see two homes. The paint was peeling on the first house, and the driveway was heaving in spots. "It may be a handyman's special," he said, "but look at the view." The house sat at the foot of a purple mountain, adjacent to ten acres of untouched forest. Then the group went to see a charming two-story stone farmhouse with five bedrooms, a big kitchen, and plenty of c…