Property Crossroads - Real Estate Info

Did You Commit this Top 5 Mistakes during the Housing Bubble?

by Maricel Ferrer-Custodio on May 24th, 2007

Joshua Dorkin of BiggerPockets.com wrote an article about "The 5 Biggest Mistakes Made By Real Estate Investors During the Housing Bubble".   I would not exactly call it the Top 5 Biggest Mistakes, but it is still a good list of things to consider when investing in the property market.  He essentially talked about how some people can get too emotional about their  property that they forgot to analyze the validity of their investment.  It is a good reality check because these are some of the things that most people do without even realizing the consequences.

Here is Joshua Dorkin’s List:

1) Forgetting about the Past

2) Irrational Exuberance

3) Ignoring the Numbers

4) Becoming Emotionally Desperate

5) Becoming Greedy

Among the things he pointed out, I totally agree with last two; becoming emotionally desperate and greedy. Some people tend to join the bandwagon even if its the wrong one.  Others fail to accept the actual market price of their property and has their own perceived value.  As Joshua Dorkin pointed out "when greed takes over, disaster can follow".

Selling an overpriced property usually takes longer to market specially during the current real estate climate.  Some owners can get too personally attached with their property and how much profit they want out of it, that they base the selling price on their needs.  In the end, after sitting too long in the property market they would eventually lower the price.  It is such a waste of their time. They also missed out on the genuine buyers who were priced out from their original selling price.

I wrote a related article "Set your Emotions Straight: The First Step to Real Estate Success" which explains why real estate investment should not be an emotional exercise.

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POSTED IN: Buying a Property, Top Ten Lists