Do you suffer from sunk cost fallacy?

By
Services for Real Estate Pros with Marte Cliff Copywriting

Chances are, you either suffer from sunk cost fallacy right now, or you have at some time.

 

What the heck is it?

 

Sunk cost fallacy is a debilitating condition that causes you to throw good money after bad.

You know you have it when you…

Keep advertising a listing owned by people who:

• Refuse to clean the housedrop the sellers who refuse to clean house
• Refuse to list anywhere near fair market value
• Refuse to negotiate AT ALL when you bring an offer
• Refuse to leave and let the house be shown without interference
• Refuse to allow showings except at specified times

Keep driving all over the county with buyers who haven’t even bothered to become pre-approved for a loan.

You also know you have it when you keep paying for leads when none of that company’s leads have resulted in “real” clients for the past six months. You do so out of a misguided belief that if you just hold on a little longer, you’ll get a good return on the money already spent.

Sunk cost fallacy can also cause you to sabotage your own marketing efforts by continuing to use marketing materials that don’t produce results.

You know you have it if you keep mailing the same letter, postcard, brochure, or flier that hasn’t ever produced a lead.

It’s also evident when you go ahead and use a graphic design, a marketing letter, or even an entire website that you know isn’t up to par – just because you already paid for it.

This condition isn’t just for business – it can show up in more personal ways.

You have it when, for instance, you keep wearing a pair of shoes that hurt your feet, or a shirt whose color makes your face look sallow.

Sunk cost fallacy comes about when you’ve spent so much time and money on a client or a marketing method – or a pair of shoes – that you can’t stand to give up.

What is the cure for this expensive condition?

stop chasing the  money that got awayTake a close look at what you’re doing, and be realistic. If that client is probably never going to get to closing, or if you’re going to end up making minimum wage, bow out.Remember that people like that don’t just cost money. They’re a drain on your emotions and your mental state, and that can hurt you both at work and at home.

If that marketing method isn’t bringing you results after several months – make positive changes.

Have your marketing messages re-written, buy new and better prospecting letters, hire a new website developer, or spend the time to make the changes yourself.

If the leads you buy aren’t bringing you business, look first at how you’re marketing to them. If the same marketing produces leads from other sources, then you’ll know its the leads that aren’t good – so stop buying!

One more thing…

Sunk cost fallacy can apply to time as well as money. Be careful!

 

Clutter Image courtesy of Bill Longshaw at FreeDigitalPhotos.net
chasing money Image courtesy of Sira Anamwong at FreeDigitalPhotos.net

This post first appeared at https://copybymarte.com/do-you-suffer-from-sunk-cost-fallacy/

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Rainmaker
3,814,512
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good evening Marte Cliff ,

I love this phrase and have never heard of it before! Great advice for us all because I'm sure we've all experienced at one time or another.

Aug 10, 2019 06:56 PM #4
Ambassador
3,870,501
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

                                               

                                                      Thank you, Marte. 

Aug 10, 2019 07:26 PM #5
Rainmaker
1,537,513
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Kathy Streib Yes - I have a 1991 Chevy pickup with a 454... I love that truck.

Aug 10, 2019 08:24 PM #6
Rainmaker
1,239,394
Michele Cadogan-Cell 917-861-9166
Fillmore Real Estate 2990 Av U, Bklyn , NY 11229 - Brooklyn, NY
Licensed Real Estate Associate Broker -

Your post reminds me of the  saying about  inspect what you expect.  It is  always good take account of where our money/ expenses is going and the type of  results we are getting.  Glad that you also mention  Sunk Cost Fallacy can also  apply to how we use our time. 

Aug 10, 2019 08:29 PM #7
Rainmaker
1,537,513
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Dorie Dillard CRS GRI ABR I think it's especially hard to give up on a prospect once you've spent considerable time and/or money on them. But sometimes it's the only smart thing to do.

Aug 10, 2019 08:32 PM #8
Rainmaker
1,537,513
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Michele Cadogan-Cell 917-861-9166 Our time is even more valuable than our money. We can get more money - we can't get more time.

Aug 10, 2019 08:34 PM #9
Rainmaker
3,253,076
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

S000 many people who are self employe don't get the whole time IS money thing !

Aug 11, 2019 12:32 AM #10
Rainmaker
4,992,833
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

Good morning, Marte Cliff some make an honest effort of killing their own businesses....

Aug 11, 2019 04:27 AM #11
Rainmaker
435,339
Tom Bailey
Margaret Rudd & Associates Inc. - Oak Island, NC

Marte, There is another name for that “ throwing good money after bad”!

Aug 11, 2019 06:05 AM #12
Rainmaker
3,274,898
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Marte. Never heard the phrase but can attest to the fact, been there, done that! Enjoy your day!

Aug 11, 2019 06:59 AM #13
Rainmaker
3,092,470
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Good morning, Marte... when I trained new agents I used to tell them that one of the hardest things to learn, but important to learn quickly, was not to throw good money after bad and to know how to quickly fire the wrong clients and stop wasting time, which is ultimately wasting money.

Aug 11, 2019 07:47 AM #14
Ambassador
3,987,115
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Hi Marte:

That is new terminology to me but the premise behind it is not. This us a good reminder for us to always be questionning what we are spending money on and is it getting us the return we want and expect.

Jeff

Aug 11, 2019 11:34 AM #15
Rainmaker
3,131,357
Kristin Johnston - REALTOR®
RE/MAX Realty Center - Waukesha, WI
Giving Back With Each Home Sold!

Great post!  I certainly can see why Kathy chose to highlight it this week!

Aug 12, 2019 07:09 AM #16
Rainmaker
1,537,513
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Sally K. & David L. Hanson - Yes, just like so many don't realize time is life. How many times have you heard someone say they're just "Killing time?"

Barbara Todaro I'm sure that isn't their intent, but yes, they certainly do.

Tom Bailey Yes. We all know we shouldn't do it, and yet...

Aug 12, 2019 07:29 AM #17
Rainmaker
1,537,513
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Wayne Martin I expect we've all done it at some time or another.

Nina Hollander You did those agents a great service by trying to teach that concept. It's a tough one, especially for new agents who think they really "need" every client that comes their way.

Aug 12, 2019 07:31 AM #18
Rainmaker
1,537,513
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Jeff Dowler, CRS If we don't pay attention to where we spend our money - or our time - it will drain away without providing any return on investment.

Aug 12, 2019 07:32 AM #19
Ambassador
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Anna Banana Kruchten CRB, CRS 602-380-4886
Phoenix Property Shoppe - Phoenix, AZ
Arizona's Top Banana!

Hey Marte - Kathy sent me over here as I missed this one!  OMG agents need to learn this new 'term' right off the bat our of real estate school and save themselves awhole bundle of cash and stress!

Aug 12, 2019 01:47 PM #20
Rainmaker
1,537,513
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Anna Banana Kruchten CRB, CRS 602-380-4886 Yes - new agents are hit with so much "advice" about how to market themselves. They can spend a bundle without realizing any benefit at all.

Aug 12, 2019 09:23 PM #21
Rainmaker
978,622
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

It's so important to examine where those advertising costs and similar $ are going vs each client! 

Aug 20, 2019 09:28 PM #22
Rainmaker
1,537,513
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Jan Green Spending money is easy - making sure those dollars work for you takes a bit more thought.

Aug 21, 2019 10:22 AM #23
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