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The time to start thinking about selling your aircraft is just before you buy it!
What??? You are kidding right?
Not kidding, that is the ideal time to check that all the aircraft logbooks and documentation are complete and in order – before you buy it! But, check again before you try to sell it.
And by the way, don’t assume that the perfectly competent and approved maintenance and repair organisation (MRO) who have done a great job of maintaining your aircraft for many years have also been equally good at keeping your logbooks organised and legible. You, the owner, are ultimately responsible for your records being in order.
Technical Records What you are checking for ideally and what you can expect your prospective buyer to be looking for includes: – logbooks from new, from zero hours on Airframe, Engines and Propeller(s). Obviously engine and propeller logbooks prior to last zero time overhaul are not really required. However, check that zero time overhaul by the engine manufacturer gives you a start with a fresh engine logbook NOT quite the same as zero time since major overhaul (SMOH). Buyers want to know the total engine hours since NEW and, ideally, engine logbooks since NEW not just SMOH because it makes a difference if the next overhaul will be at least the 3rd time the same engine was overhauled. – logbooks that are legible and complete – a good record of ADs and SBs applicable and complied with – life limited parts list – all applicable EASA Form 1s if it is on an EASA register – all applicable FAA Form 8130 and Form 337s if it is or while it was on the FAA register #
For example, one FAA inspection failed an aircraft on the following: – STC fitted but no corresponding Form 337 – Handheld GPS hard-wired for power rather than through “cigar lighter” socket but no Form 337 – Interior refurbished with best Connoly leather by expert car restorer but no fire certificate or Form 337 – Same with the replacement carpets – Failed Altitude Encoder replaced by an identical one from a G-Reg aircraft (and unfortunately noted in maintenance work pack). By the way, if you can get all your logbooks scanned that is a great help in the worldwide market. I find that prospective buyers outside the UK really welcome the opportunity to look through logbooks before travelling to the UK to view the aircraft and it has become an expectation especially in the US market (even before the current travel difficulties imposed by the pandemic).
Other records VAT – do you have a record of VAT having been paid within the EU or in the UK, typically on importation to the EU or the UK? If not, the buyer may face having to pay VAT. One of the consequences of Brexit is that if an aircraft is imported from the UK to the EU or imported from the EU to the UK, the fact that EU or UK VAT may have already been paid while the UK was in the EU, does NOT necessarily mean that it does not have to be paid again. To clarify, if an aircraft is imported to the UK from France, UK VAT will apply even if VAT had already been paid in France. Equally, if an aircraft is imported to France from the UK, French VAT will be due even if VAT had previously been paid in the UK while it was in the EU. Don’t take my word for it but if an aircraft has been on a UK/EU register for many years, there is an assumption by Customs in most European countries that VAT must have been paid at some point. Not so for N-reg aircraft. Also consider, if your aircraft is owned by your VAT registered company, that VAT may have been reclaimed from the tax authorities and will be due again if it is sold to a VAT liable private individual.
Pricing There is the inevitably truism – an aircraft (like everything else) are only worth what someone is prepared to pay for it. Not surprisingly, almost every owner thinks their “baby” is worth more than the market will bear. Sometimes because they have recently spent a lot of money on maintenance / engine overhauls / propeller overhauls / airframe mods /avionics upgrades / interior refurbishment / new paint. Of course all these things can add value but we all know that £50,000 spent on avionics upgrades typically does not increase the value your aircraft by £50k. On the other hand, some or all of those things may make the aircraft easier to sell. If the paint is tired, don’t rush off to spend £15k or more on new paint, you won’t get your money back and the prospective buyer may well have preferred the choice to pay less to buy it and then have it repainted in the scheme and colours of their own choosing. My best advice when pricing an aircraft to sell is to put yourself in the shoes of a prospective buyer and consider what you would pay for your aircraft if you were about to buy it given its condition, current market demand for the aircraft type and other competing aircraft on the market. If you want a relatively quick sale, then that is the amount you should have in your mind as the sale price you would seriously consider accepting.
That is NOT the price you will be advertising it at. Unfortunate though it is in my opinion, the advertised sale price of used light aircraft is usually seen by prospective buyers as the starting point for negotiation. You should seriously consider taking a broker’s advice and, if in doubt, by all means seek a second broker’s advice. If you are desperate to sell quickly to raise cash then some brokers will buy it off you immediately at a wholesale price with the hope of making a much larger margin than brokers like myself, who act more like property estate agents. There is something to be said for both types. Of course, the wholesale buyer is taking the risk of on-going storage and maintenance while waiting to sell, so they will be careful what they buy to sell. Bear in mind that if you price it too high, either it will take longer for the right buyer to come along (it is possible that you get lucky and the right one comes along straight away) or you end up reviewing the price down after a few months of insufficient interest, all the while at the very least incurring the on-going fixed costs of keeping the aircraft. Also, in my experience advertising it as “make offer” does not help sales. Either you get a whole lot of “silly” offers or you get fewer enquiries because many prospective buyers will not bother enquiring without having some idea of what price the vendor is looking for (as a starting point). And by the way, you had better also be flying it a bit. No buyer is keen on an aircraft that has been sitting around for 6 months with no hours logged.
Use a broker or sell it yourself There is no reason, other than your considerable time and effort, why you can’t sell it yourself without employing a broker. You can advertise for next to nothing on excellent sites like planecheck.com where your only commitment is an honour-based commitment to pay them €50 or €100 (Euros) if you sell to someone who found your aircraft through their web site. In the meantime, be prepared to deal with daily phone calls and emails with enquiries about the detail of your aircraft from its history to its performance, fuel consumption and what your best price is. Many of those enquiries will go no further than a few exchanges of emails and phone calls. What will broker do for their money? – Provide an appraisal of expected market value and advise on initial asking price – Establish that all technical logs and legal documents for the aircraft are current and accessible – Advertise/market your aircraft through a variety of online and printed media appropriate to the aircraft type, value and likely geographic markets – Deal with all the calls and email enquiries promptly and keep you informed of “serious” enquiries
– Provide technical data on aircraft maintenance status, performance, Weight and Balance etc. to prospective buyers – for some aircraft types, especially home builds, for example, you may need to help provide the information to the broker – Arrange, with you, pre-buy viewings and engineering inspections – Present the aircraft to the prospective buyers for their viewing/inspection – Negotiate an acceptable sales price in agreement with the owner(s) – Close the sale – Produce a Purchase Agreement between you and purchaser defining the terms and conditions of the sale and what, how, where and by what means the aircraft is to be delivered – Assist you in the sales process including the production of a Bill of Sale and notification to change of ownership to the relevant registration authority
Pre-purchase (or pre-buy) inspection This will typically be an ideal opportunity for the prospective buyer, supported by his chosen engineer, to find fault with your aircraft either physically or in the tech records that can be a negotiating point on the sale price. Don’t let it happen! Make sure the prospective buyer and his engineer are informed about any known defects before they find it. Even damage history that the engineer won’t find physically, because it has been perfectly repaired, but will find recorded in the logbooks.
Finally (for now) Fix any minor, cheap to repair, defects before they become a talking point in the sale. A good clean and polish is probably the quickest way to make your plane a little more attractive. Having a clean windshield and side windows also helps.
If your airplane interior has stains or tears, consider having them professionally cleaned or restored! Most aircraft buyers will of course accept a little wear on a used plane, but they may not tolerate as much as you might expect. Presenting your aircraft to the market with freshly cleaned carpets and interiors can make your plane more attractive to buyers who are willing to make an offer. Your broker will also be pleased not to have to empty your aircraft of all your personal belongings before any prospective buyer comes to look at it. Aircraft that are presented clean and tidy create a better first impressions and are easier to sell.
Good luck!
Note: This article focuses primarily on piston engine aircraft sales though some of the points apply equally to light jets.
Copyright John Vahgatsi Managing Director JKV Aviation Ltd
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