Iterative multilateration techniques have been proposed to improve position estimates in localization schemes for sensor networks. However, these techniques are hampered by problems such as propagation of errors, which results in inferior estimates, and high communication overheads leading to poor scalability. In view of this, a novel Selective Iterative Multilateration (SIM) algorithm is described in this paper to improve the accuracy of location estimation in hop count-based localization schemes without incurring unnecessary overhead costs. New anchor nodes are selected judiciously such that their initial position estimates are sufficiently accurate. Also, such new anchor nodes are prevented from appearing in the same regions so that unnecessary overhead is kept to a minimum.