Sales Price as a Percentage of List Price in Granger’s Covington Shores Neighborhood

by Nick Molnar on May 16, 2008

Granger, Indiana doesn’t get much discussion on the web’s real estate boards but it did get an interesting question recently on Trulia:


What is the average percent paid for homes sold in Covington shores, and fox chase – on the water?

This is obviously someone who is smart about real estate and is doing their research before they make any large financial decisions. But they are being drawn into a common trap – thinking of sales in relation to list price rather than to inherent value.


But, there are two flaws with that way of valuing homes. The first is that list prices are arbitrary – there is nothing to prevent someone with a $500,000 home from listing it for sale for $900,000. Likewise there is nothing to keep you from under pricing a home and asking $300,000 for that same $500,000 house. Using list price as a guide assumes the list price is founded on something solid, and that’s often not the case.


The second reason it’s dangerous to use percent of list price as a benchmark is that list prices change. Every time you see a “price reduced” advertisement that’s a change to the list price. And, because it’s easier to query, most statistics you’ll see for sale price as a percent of list price are the sale price relative to the list price at the time of sale. A bit of reflection will show you that of course the house will sell for near list price once the price has been reduced closer to an amount at which the house will sell.


If you still want to see the percent of list price paid for homes, compare it to the original price, and take it with a grain of salt.


If you’re buying, base your offer on fundamentals and comparable recent sales, not the asking price.


If you’re selling, realize that you won’t be able to game the system with an artificially high list price and expect to set that as the benchmark for negotiations. Buyers won’t even look at your house. Put your energy into making your home look as good as it can and getting it in front of as many people as you can for the best result.


Here’s the breakdown of sales this year in Covington Shores, on the water: 




Sale price

Original list price

List price at time of sale

Sale price as % of original list price

Sale price as % of list price at time of sale













14228 AVERY












{ 6 comments… read them below or add one }

Marky May 16, 2008 at 11:28 am

Nice commentary regarding “real” home prices. Since people do not buy homes very often, it is important that people do their homework.


Bethany May 16, 2008 at 3:28 pm

How do you find out the selling price of a house? Also, is there a way to find out the original list price and all of the price changes? Oh, and the original list date? (Expecially when they come off of the market, then go back on as a new listing.) Thanks for any advice! Bethany


Nick Molnar May 16, 2008 at 9:03 pm

If you’re working with a Realtor, s/he can easily get you price history and sales prices for any property that has sold through the local mls. You can search the public side of the mls, for current information, but you won’t see information on sold properties there.

If you’re unrepresented, the sales price is a matter of public record and you can get it from the township or county courthouse I believe.

If you are looking for information about a specific property, e-mail me and I’ll see if I can help you learn it’s history.


NDtom May 16, 2008 at 10:24 pm

Looks like a good chunk of home prices were reported overpriced in the South Bend market due to massive fraud. 190 houses being sold for 2-4 times the real market value. Granted, most of these were low priced homes sold for under $100K but really worth far less. I’m sure this is just ONE of the examples of real estate fraud that was going on in our area. I had heard of others recently. Amazing that in this very modest priced market this type of thing went on on such a large scale. I know in some of the major U.S. cities this type of fraud was utterly massive with a lot of foreigners getting cash at closing and then simply leaving the country. When all is said and done we’ll realize the enormous scale that this activity caused all prices to increase. So, not only are banks and mortgage note holders out massive amounts of money, but those home buyers who purchased a house during this five year housing bubble also are victims in that they overpaid for their homes due this fraudulent demand and reported comps…. The Great Housing Bubble will surely be the largest bank theft underlying it in history. Amazing.

May 16. 2008 7:12PM

Officer pleads guilty to bank fraud

Tribune Staff Writers

SOUTH BEND — A South Bend police officer has admitted to a mortgage loan scam that involved 190 houses in the South Bend area and bilked lenders out of hundreds of thousands of dollars.

Sgt. Robert Culp, a 17-year veteran of the department, was relieved of duty with pay Friday, pending the adjudication of his case, a South Bend police spokesman said.

Culp, 43, of New Carlisle, who works in the Metro Special Operations Section, was involved in a scheme between 2003 and 2007 to buy dilapidated houses and sell them at two or three times their actual value, according to federal court documents.

But the sales, according to a petition to plead guilty filed by Culp, were made to “straw purchasers” — individuals recruited by Culp and accomplices to purchase the homes at the inflated price.

For agreeing to buy the home at a highly inflated price, the straw purchasers was told that he would receive 20 percent of the mortgage loan back, and that Culp and associates would cover the closing costs on the purchase.

In some cases, Culp also agreed to pay the first year’s mortgage or to find tenants for the property.

Once a straw purchaser was found, Culp, according to his plea, would work with two local loan agents to secure mortgages from Wells Fargo and other lenders.

The mortgages — usually made at 80 to 90 percent of the reported purchase price — would then be divided up among Culp, the local agents, Culp’s accomplices and the home’s purchaser, who usually received about 20 percent of the home’s sale price back.

For each home sold, Culp estimated that he made between $5,000 and $7,000.

Culp wrote that he and accomplices would also help pay the closing costs on the home, and would often inflate the purchaser’s assets on the mortgage application.

Culp admitted to selling a home at 1405 Linden Street, South Bend, in November 2005 for $69,000. He had purchased the property for $19,000.

Culp wrote that a mortgage loan of $58,650 was obtained for the house — which still needed repairs to the roof and the electrical and plumbing systems — by a straw purchaser from Wells Fargo.

The home then went into foreclosure, with Wells Fargo scheduling the foreclosure sale for May 15.

Culp could have faced up to 30 years in prison and a million dollar fine before the agreement. In his plea he agreed to pay full restitution and will continue to cooperate with federal prosecutors, including testifying in a grand jury investigation in exchange for a recommendation for a lesser sentence.


Bethany May 16, 2008 at 10:26 pm

Thank you so much for the help! Bethany


Bethany May 19, 2008 at 4:42 pm

NDtom, thanks for posting this article. It’s really interesting and as a future home buyer in that lower-priced bracket, it’s great to be informed of possible pricing issues. I’ve been really skeptical of some prices I’ve been seeing, especially in the neighborhoods I’ve been looking, as I’m inexplicably drawn to traditionally less desirable neighborhoods. 🙂 Knowledge is power, right? Thanks so much for sharing.


Leave a Comment