Being in the aircraft brokerage business for decades and working with clients from all over the world, there are a few aspects of the transaction process that come as surprises to some. If you can prepare in advance for these items, you can minimise frustration and discord in when it comes time for you to buy or sell your jet.
Here are some of the top expectations we can encourage our clients to understand.
The transaction process will take longer than you think it will.
From the time an LOI has been agreed between buyer and seller, you should expect 2 to 3 months to closing. This time frame does not include the time spent searching for your jet and going to visit options before you decide on one you wish to move forward on. The transaction process is made up of many parts and sometimes one of those, such as contract negotiations or the Pre-Purchase Inspection, can take longer than anticipated.
See article: Why It Takes Longer Than You Think
There will be defects in the PPI.
A common opinion among Sellers is that their Aircraft has been properly maintained by a reputable maintenance facility so there will not be any defects on their aircraft. However, every aircraft that enters into a PPI will have defects. Even if it is a new Aircraft that has been freshly maintained at one facility, if you take it to another and ask them to look at five items, they will find a defect. Jets are made of so many different components and defects are something that happen as a part of ownership. For Buyers, keep in mind that defects do not mean an Aircraft has been improperly maintained. As stated, this is aviation and defects are always found. Even the best aircraft in the world, will have a defect in an inspection.
See article: What to Expect from the Pre-Purchase Inspection
Value wins.
Warren Buffet said “Price is what you pay for; Value is what you get.” As a buyer, shop for value. getting more value in a jet may mean a higher price. Some buyers fall in love with a really low price. However, this may and usually means lower value than a higher priced jet. A few examples of value items are low time, upcoming maintenance completed, upcoming avionics modifications installed, or certain interior configurations. Do not focus solely on price or you will miss the true value of the jet. As a seller, price your Aircraft in line with its value. Speak with your broker about this to determine what your jet offers. This may mean you can ask for a slightly increased price because you have just completed a major inspection or installed ADS-B out, for example. Or perhaps, you are lacking certain value items and need to have a lower price to attract potential buyers. Buyers are looking analytically and comparatively. Your price has to be in line with your jets value; there must be a reason your asking price is what it is.
For an aircraft transaction to have its best chance at going as smoothly as possible, it is best to try and manage your expectations from the beginning. There can always be surprises but knowing these main points will help you mentally prepare for some of the things that may come up.
These are three universal expectations for your aircraft transaction whether you are the buyer or seller. Part 2 will look at specific expectations for each party.
Blogs are written from real world experience by Colibri Aircraft’s individuals. If you have any questions or comments about the topic of this blog, please feel free to contact our team at enquiries@colibriaircraft.com
