We consider the problem of estimating the location of a moving target in a 2-D plane. In this paper, we focus attention on selecting an appropriate 3rd sensor, given two sensors, with a view to minimize the estimation error. Only the selected sensors need to measure distance to the target and communicate the same to the central “tracker”. This minimizes bandwidth and energy consumed in measurement and communication while achieving near minimum estimation error. In this paper, we have proposed that the 3rd sensor be selected based on three measures viz. (a) collinearity, (b) deviation from the ideal direction in which the sensor should be selected, and (c) proximity of the sensor from the target. We assume that the measurements are subject to multiplicative error. Further, we use least square error estimation technique to estimate the target location. Simulation results show that using the proposed algorithm it is possible to achieve near minimum error in target location.