I’m about to put my house on the market, so I’ve been thinking a lot lately about the concept of sunk cost. Sunk cost refers to the non-refundable investment you have already made into a project, case or, in this example, structure. It is tempting to total up all your investment and try to set a price that will cover all that cost, so ultimately you make a profit and justify your prior decisions. The only problem is that the buyer—of your house, project or your lawsuit—doesn’t really care what your investment was or usually feel a particular need to help you make a profit. Their valuation is typically based on different elements, like the market price of comparable real estate, costs from alternate providers, or in the case of lawsuits, comparable settlements or verdict exposure. The better approach is to view your sunk cost as water under the bridge: money that has already been spent on experts, legal fees or the like. If the market will bear it, by all means try to cover that cost and more. But it is foolhardy to be swayed in your valuation by the amount of investment you have in the case. If you made a mistake in calculating what investment was worthwhile, you are better off cutting your losses now. Don’t throw good money after bad by getting hung up on your sunk costs. And if you are looking for a lovely house in central Mass, let me know– I can get you a deal.