BeechTalk - BT - How to buy an airplane in a seller's market.

Username Protected · **Posted:** 03 Dec 2020, 08:44

What does it mean to “know the market?” I could spend weeks looking at the seller sites and get a good idea of asking prices, and join the type forums to learn what the gotchas are. But without a broker or an appraisal, it’s pretty tough to know whether a list price is a steal or a ripoff.

Username Protected · **Posted:** 03 Dec 2020, 08:57

I get it but does it really matter if you end up buy the airplane 5-10% overpriced.
We should not be spending our kids tennis shoe money nor buying an airplane and worried about other monetary needs.

Airplanes for me have been a great material reward for my decades of 60+ hours a week hard labor. So much greater than anything else.....material.

Way down the line in terms of really important.

Username Protected · **Posted:** 03 Dec 2020, 10:03

What Charles said.

Robert T

Username Protected · **Posted:** 03 Dec 2020, 10:37

Username Protected wrote:

What Charles said.

Robert T

Exactly! The buying process can’t be a drawn out learning process. The buyer has to be “learned”, take some risk and move fast!

Best,

Tom

Username Protected · **Posted:** 03 Dec 2020, 10:57

Username Protected wrote:

I get it but does it really matter if you end up buy the airplane 5-10% overpriced.
We should not be spending our kids tennis shoe money nor buying an airplane and worried about other monetary needs.

Airplanes for me have been a great material reward for my decades of 60+ hours a week hard labor. So much greater than anything else.....material.

Way down the line in terms of really important.

Agreed

Username Protected · **Posted:** 03 Dec 2020, 11:03

If you're looking at a "vintage" Bonanza (<70k) that's had consecutive,
"retail" annuals from a well known shop(s), don't be so concerned with a pre-buy.

What do you think you're going to find?

If the seller is anxious at the thought of their plane sitting at another airport in pieces,
with the chance of you walking away midstream...leaving them holding the bag...

The cookie cutter way of buying a plane (pre-buy) doesn't apply to all situations.

Username Protected · **Posted:** 03 Dec 2020, 11:12

Step number one with any aircraft purchase is to pay for a title search.

To delay that puts the transaction and any money you spend on it in jeopardy.

Username Protected · **Posted:** 03 Dec 2020, 12:27

Username Protected wrote:

The way you succeed in a seller's market is to accept risk.

Everything you read about how to buy an airplane involves a slow, laborious process that is fraught with risk and labor for the seller. First you want to review the logbooks that you ask the seller to scan, then you make an offer with 16 different ways for you to get out of the deal, and there's an escrow servive and a title search then you schedule a pre-buy 3 weeks out someplace 200 miles from the homebase (because you want an independent mechanic and someone with a reputation for knowing the airplane) then you get a squawk list with 84 items on it and hem and haw about whether the seller is going to fix all of these items, 72 of which you would try to talk your own mechanic out of at the next annual. And the point of all this is to presumably get an airplane that will serve you well at minimal cost and - perhaps most importantly - minimal surprises.

But the truth is airplane ownership is full of surprises and they just start when you buy the plane. The way you survive in a seller's market is to quickly focus on the big gotchas that can be rapidly and objectively determined (eg complete logbooks) and accept that you cannot string out the deal for 3 months futilely trying to eliminate all risk to the purchase.

You're going to take some calculated risks. Say you have a bonanza with 10 year old paint, 1 year old glass panel and a 1200SMOH engine installed 8 years ago. That indicates an involved seller. That airplane is likely to be a good airplane. If you want it, go give the man a $5,000 deposit and close the deal within a week. Bring your mechanic to look at the logs and maybe cut an oil filter open.

100% accurate right here.

Username Protected · **Posted:** 03 Dec 2020, 14:10

The last month of the year is a funny time in the used aircraft market; activity is driven by tax considerations (on both buying and selling) for aircraft used in business, and it's hard to find and schedule pre-buys due to the holidays. Seems like inventory dwindles as fewer people list their aircraft. But I think you can also get good deals if you've got cash and can move quickly on the right airplane. But I think it's airframe-specific.

I think the Meridian market is a good example. Avidyne planes sit for a long time, Garmin Meridians move quick. Same airplane, same performance. Just reflects what buyers seem to want. If you don't mind Avidyne, you can get a good deal.

The M600 has the name 600 because the PT6A-42A is derated to 600 hp, vs. the 500 hp to which it's derated in the Meridian/M500. But the range increase is a happy coincidence! Even the 600 market has segmented into the early serials (1 to 80-something) with the original G3000 and the later serials with the updated G3000 series (which can in turn theoretically be updated to add auto-land and auto-throttles).

As Chip said, it's a strange collection of small markets rather than a single market...

Username Protected · **Posted:** 03 Dec 2020, 14:41

Username Protected wrote:

What does it mean to “know the market?” I could spend weeks looking at the seller sites and get a good idea of asking prices, and join the type forums to learn what the gotchas are. But without a broker or an appraisal, it’s pretty tough to know whether a list price is a steal or a ripoff.

You can get a pretty good feel for the market by asking sellers who recently sold theirs what they got for it. Sometimes they'll lie, sometimes they won't tell you, but as your shopping it's good to collect those data points.

Yes, because of the access to information and contacts we have, I can find out what the last six or eight airplanes sold for in a day or two. Unfortunately it only works on turbine aircraft since, pistons aren't tracked.

This information has become critical this year as deals have become rarer and buyers are having to pay much closer to asking prices for airplanes. We've actually provided research services for buyers and management companies this year a la carte to help meet the demand, these were folks that didn't need us to handle the acquisition but did need our research team to figure out the market / values and look for off market airplanes. It's been a win / win, we have more capacity in our research department than we have on the managing acquisitions side so our researchers are happy and making a little extra money and I feel like we are helping more people without getting overwhelmed.

Username Protected · **Posted:** 03 Dec 2020, 14:42

This isn't complicated, and it's no different than buying a plane (anything at all for that matter) in any kind of market. People seek to make it mysterious to promote their own ends or improve their own reputations.

The most significant key to making a sound bargain in anything is simply to understand the market you are dealing in (and in the airplane market every model, and many sub models, are their own market subject to their own rules and idiosyncrasies). This requires that you do your homework. Another is to very well understand your own needs, capabilities and time frame. The third is the reciprocal of the second and that is to gather as much information as you can about the seller and his/her situation, needs, etc. The fourth is to test your theories (in buying that means making offers and negotiating even if unsuccessfully). Lastly, a good bargain is one that meets your needs affordably and that requires not getting hung up on the purchase price (as the largest costs of ownership can be something else altogether).

The thread was started, as his often are, by someone hoping to gain from it. But a professional buyer's representative isn't necessary to making a good deal at all. However, one can skip some of the work, and benefit from the expertise, of a buyer's representative (I certainly have) but I think buying well, even with help, usually means doing your own independent work.

Username Protected · **Posted:** 03 Dec 2020, 16:50

Quote:

The thread was started, as his often are, by someone hoping to gain from it.

Is that so bad? The guy buys more aircraft in one year than most of us will in 3 lifetimes. I personally like hearing the insight. I don't care if there's a subtle pitch for his services. I'm a big boy and can decide whether to use those services or not.

Username Protected · **Posted:** 03 Dec 2020, 17:21

Username Protected wrote:

Quote:

The thread was started, as his often are, by someone hoping to gain from it.

Is that so bad? The guy buys more aircraft in one year than most of us will in 3 lifetimes. I personally like hearing the insight. I don't care if there's a subtle pitch for his services. I'm a big boy and can decide whether to use those services or not.

AND...he is a BT sponsor so fair game.

Username Protected · **Posted:** 03 Dec 2020, 21:32

Username Protected wrote:

Is that so bad? The guy buys more aircraft in one year than most of us will in 3 lifetimes. I personally like hearing the insight. I don't care if there's a subtle pitch for his services. I'm a big boy and can decide whether to use those services or not.

AND...he is a BT sponsor so fair game.

Username Protected · **Posted:** 04 Dec 2020, 00:24

Username Protected wrote:

The third.... The fourth is to test your theories....

The fifth key to ownership is to be rich. :thumbup: