The world of aircraft sales is fraught with risk and it is a wise buyer who retains professional assistance in the process of buying or selling an airplane. However, the risk in the selection process is not merely limited to what airplane to choose. In some cases the risk starts with the advisor you choose!
Just because someone holds themselves out as having years of experience in the aviation industry does not necessarily make them an expert in the preowned marketplace. This subset of the aircraft sales profession suffers from an overabundance of self-proclaimed experts who in reality have little or no experience in this unique arena. They may very well have held jobs directly related to the operation, maintenance or even sold new aircraft, but it is a misconception to think that they thus hold the skill set necessary to see a complex transaction through from start to finish. If the deal is more complex, such as a cross-border sale or dealing with a repossession, then you need to make sure that the agent you hire has that specific experience. Nearly all my peers at one time or another have encountered legal counsel who seem to think they can manage the deal better than an experienced preowned salesperson. Perhaps the perceived largess to be earned, accolades to be bestowed or allure of mixing with the top one percenters and business leaders the world over draws folks to the aircraft sales world like a moth to flame. Caveat emptor.
In absence of any regulation or requirement for formal credentials that substantiate one is qualified to conduct a pre-owned aircraft sales transaction, the prospective buyer or seller has little to go on in terms of validating a broker’s level of expertise other than perhaps word of mouth or advertising. While references and recommendations should be requested and verified, does the enduser really understand what qualifies as experience in the preowned aircraft sales marketplace? Being a nice person alone is not good enough. Having years of new aircraft sales experience is not enough. Having spent a career specializing in a particular area of the aviation industry is not enough. Advertising in the aviation industry can be a lot of smoke and mirrors and if you do not know what you are reading, you can easily be beguiled into believing that bigger is better. Anyone can create glossy advertising depicting a wide array of aircraft for sale, but do they really? All the while making claims as to their expertise in aircraft sales.
As you might have guessed, I am here to offer a short tutorial on what to look for when evaluating who to hire to handle your aircraft acquisition or sale. First time buyers in particular…pay attention! You are most at risk as you will for the most part have no basis for comparison. An experienced preowned aircraft sales expert is completely comfortable with taking a transaction from start to finish. As one would expect, they should have an industry network in place, first-hand experience working with the various maintenance facilities and other experts you may seek to employ in the sales process including escrow agents, free-lance technical advisors and legal counsel. After all you are paying that individual to in essence be a project manager and they should have a working knowledge of what each party in a qualified go-to team brings to the table.
An experienced aircraft sales professional will have access to research data for a particular make/model of airplane including comps on which to base what you should be paying for a targeted airplane. Indepth primary research of course assures you of complete coverage. If the salesperson you are dealing with is not able to reach out to each and every owner within a select make/model, then you are not getting what you are in part paying them for. While it doesn’t mean you should not buy an already advertised airplane, you do want to be assured you did not miss any off-market opportunities.
An experienced aircraft sales professional is familiar with all the documents necessary to conduct an aircraft sale. These include, but are not limited to, all FAA documents(if a domestic U.S. sale), transactional instruments such as a Letter of Intent (LOI) or Aircraft Purchase and Sale Agreement (APSA) and the International Registry. Most aircraft sales-professionals are comfortable in drafting at least a template for an LOI and the APSA. If your expert is reluctant to do so, then at the very least they should be actively engaged in assisting legal counsel in the construction of said documents, review and negotiation in an effort to accurately put forth the mechanics of the sale and otherwise avoid obstructions and encumbrances. The list of documents grows if the sale is cross-border in nature and this is not time for your “expert” to be learning how to conduct such a transaction. Of course there is a first-time for everyone and I don’t begrudge anyone a learning curve. As much as ninety percent of the transactions my company is involved in are cross-border in nature and on many an occasion we work with an agent representing the other side who has limited experience in such. Eighty-nine percent of the time they are grateful for the assistance we offer in navigating this territory and welcome suggestions as to how to speed the plow. After all, we share a common interest and that is to conclude the transaction.
Consider it a home run if you find yourself working with an aircraft sales professional who is comfortable with conducting a first-hand review of the subject airplane and records. While the level of familiarity with the plane and logs one should have need not be on the level of a pilot or A & P mechanic, it certainly should be to the extent that one knows what attributes as well as potential problems to look for. They should also be on-site during critical junctures in the prepurchase evaluation. This includes any time a repair is called for, at the time the discrepancy list is prepared and made available for review and at the conclusion of the maintenance so verification of fault rectification is made in a timely fashion. Caveat emptor.
Timing is everything they say and no less so when it comes to an aircraft sales transaction. An aircraft sales professional will have a keen sense of timing and will keep an eye on the specific dates of performance written into an APSA. While we all want to trust that everyone will do their job, an aircraft sales person may have to help marshal the deal along, particularly when it comes to the prebuy, and they should have no reservations in doing so. The squeaky wheel gets the grease. As well, they will have a checklist of what needs to be accomplished in order to close the deal and will keep the parties to the transaction aware of what is done and needs to yet be accomplished. There are delays and then there are delays, but don’t let the delay occur because tasks were left to within days of Closing. Caveat emptor.
As this blog unfolds I realize I have just scratched the surface of the myriad of steps and tasks that encompass an aircraft sale. I could write a book, but then I could just keep writing my blog pro bono.