How do you use Escrow when selling your aircraft?

When selling an airplane, using an escrow service can provide both the buyer and the seller with a secure and transparent transaction process. Escrow is a financial arrangement where a neutral third party holds and disburses funds on behalf of the buyer and seller, ensuring that the transaction is carried out according to the agreed-upon terms. Here’s a general overview of how to use escrow when selling an airplane:

Find a reputable escrow service: Look for an established escrow service that specializes in aircraft transactions. Choose a trusted provider with a good track record and positive customer reviews.

Agree on terms: Reach a mutual agreement with the buyer on the terms of the sale, including the purchase price, any contingencies, and any specific conditions related to the transaction.

Choose an escrow agent: Select the escrow agent or company that will handle the transaction. The agent should be impartial and experienced in aircraft transactions.

Initiate the escrow process: Contact the chosen escrow agent and provide them with all the necessary details about the transaction. This typically includes information about the buyer, seller, aircraft, purchase price, and any specific conditions.

Escrow agreement: The escrow agent will create an escrow agreement that outlines the terms and conditions of the transaction. Both the buyer and seller should carefully review and sign this agreement.

Deposit funds: The buyer will deposit the agreed-upon funds into the escrow account. The funds are held securely by the escrow agent until the conditions of the sale are met.

Document verification: The escrow agent will verify all the necessary documents related to the aircraft, such as the title, registration, maintenance records, and any liens or encumbrances. This ensures that the seller has clear ownership and the aircraft is free from any legal issues.

Inspection and acceptance: If the buyer wishes to inspect the aircraft before finalizing the sale, this step will take place. The buyer should have a pre-purchase inspection conducted by a qualified aircraft mechanic or inspection facility. Once the buyer is satisfied with the aircraft’s condition, they provide their acceptance.

Closing the sale: Once all the conditions and requirements are met, including inspections, document verification, and any other contingencies, the escrow agent will disburse the funds to the seller. This typically involves transferring the funds from the escrow account to the seller’s designated account.

Finalizing paperwork: After the funds are transferred, the necessary paperwork, such as the bill of sale and transfer of ownership documents, will be processed by the escrow agent to complete the sale officially.

Using an escrow service helps mitigate risks for both parties involved in the transaction. It provides a layer of security by ensuring that the funds are held in a neutral account until all conditions are met, reducing the chances of fraud or disputes.