When to make offer- before or after pre-buy?

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Cardiff_Kook

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Cardiff_Kook
I've never bought a plane.

I've bought lots of other things of course.

Do you make an offer before or after the pre buy inspection?

I want to make sure I follow the right ettiquette.
 
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Additionally, I have found it helpful to make a lower than usual offer based on a pass/fail pre-buy. Meaning, I am not going to nickel and dime the seller but if something major comes up that would prevent the purchase like corrosion or a cracked case, I am covered. YMMV
In my mind a pre-buy is to uncover significant failings like incomplete logs, significant corrosion, bent wing, etc., not burnt out light bulbs.
 
Before, but the written version of the offer says something like: " ... offer is contingent on a pre-buy inspection verifying that the airplane has no defects that could affect its value." Or a similar escape clause that lets you walk for any reason. Nobody is going to take you to court if you walk on a typical GA plane, either. There is just not enough money involved.
 
Depends on the deal. If the asking price is far enough below fair market value I wouldn’t even bother with a PPI.

If this is more of an average deal I’d make an offer for what I think the airplane is worth to me, contingent on a PPI. The PPI is simply a check to verify the condition of the airplane and that it is as represented. If it is not, the terms of the sale get renegotiated.

My friend and I recently walked away from a deal that I thought sure we’d complete. An offer was made and accepted contingent on my inspection of the plane. We put a deposit on the plane and I made arrangements to go look at it. It turned out that the airplane had been ground looped and repaired, which was not disclosed, but that still didn’t deter us at the agreed upon price. Paperwork was spotty but that seems to be the norm when dealing with 40+ year old airplanes and it wasn’t going to be terrible to fix. The final straw was an old lien and an unwillingness to be flexible on the closing date to verify that we’d receive clear title. We bailed and offered $500 for the inconvenience of taking the plane off the market for a little over a week. I haven’t checked to see if they ever got the plane sold or not.
 
Cardiff_Kook said:
The plane is listed for $35k- I generally don't offer asking price.
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This is problematic if you wait to make offer until after pre-buy. Sounds like even if the pre-buy is a 100% perfect plane, you are predisposed to convince seller that his plane is not worth asking price. This is hard to do after you have asked the seller to hold the plane until you can schedule a pre-buy. Without prior negotiation, it is assumed you are willing to pay his asking price barring any airworthiness issues. If I were the seller of a nice plane, I would tell you to take your offer and hit the road because I don't play these games. It is better that you are upfront right from the beginning and negotiate the price before asking the seller to hold the plane for you until you can get a pre-buy performed. I do a lot of negotiations, & you don't want to give the seller any reason to make an emotional, impulsive action.
 
Before based on stated condition

Adjusted after for actual condition, or owner brings plane to stated condition.


I also write all this up in the agreement prior to the prebuy as to not burn anyone’s time, mine most importantly. Also ask yourself WWJJD What Would Judge Judy Do
 
I’ve done it both ways. When I’ve purchased from individuals, I’ve always done offer-then-ppi. But my current used plane, I bought from a dealer and I did ppi-then-offer.
 
Make an offer subject to pre buy, you can always renegotiate if the pre buy finds major problems.
 
I’ve bought two, offer first then pre-buy and if anything comes up then you renegotiate or walk.
 
Cardiff_Kook said:
I've never bought a plane.

I've bought lots of other things of course.


Do you make an offer before or after the pre buy inspection?

I want to make sure I follow the right ettiquette.

The plane is listed for $35k- I generally don't offer asking price.
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Etiquette is not the issue. The issue is protecting yourself. You don't want to make all the arrangement for a pre-buy, and possibly already paid to send your chosen mechanic to look at the plane, only to get there and find out that the plane was sold out from under you. Agree on the price and make it subject to the pre-buy. If the seller has logs available in digital form or you can go photograph them yourself, you can get a logbook review before making the offer if you are willing to take the risk of the plane selling. Just make sure that the offer is accepted in writing and you have the right to walk away based on the pre-buy and get your down payment back.
 
Lachlan said:
Do the pre-buy, assume ownership of the airplane, then work out the price from this point of higher leverage.
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Once you have assumed ownership, you have paid for the plane. What leverage do you have at that point? Perhaps I misunderstand.
 
Thanks all. Sound like offer then pre-buy. Makes sense.

Sent from my Pixel 3 using Tapatalk
 
I've always offered conditional on pre-buy. The offer comes after a personal inspection of the aircraft, logbooks, and a test flight.
 
Why would you spend you money to inspect a plane you haven’t agreed on a price? After the inspection you can renegotiate.
 
Kristin said:
Once you have assumed ownership, you have paid for the plane. What leverage do you have at that point? Perhaps I misunderstand.
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I assume was a joke, unless he really thinks the old saying “posession is 9/10s of the law”


Tom
 
If you're seriously interested in the airplane, make an offer contingent on outcome of a pre-purchase inspection. If serious issues are discovered during the inspection you can either withdraw the offer or negotiate a mutually agreeable discount to fix the issue(s).
 
I’ve bought one plane but have had offers accepted for two. The plane I ended up buying was direct drom the owner; the other was from a broker. In both cases, I had a verbal agreement on price, got an insurance quote, and lined up the financing. I made clear in both cases that the sale would be conditional on the prebuy.

The desl away from which I walked was a beautiful Cessna 185 with 10 year old paint job. Looked beautiful. Unfortunately, the prebuy found quite a bit of interior corrosion from the paint stripper which had seeped into the inside. There were also broken ribs in the horizontal stabilizer and loose rivets in the landing gear. The mechanic estimated $30K-$40K to repair. The broker wouldn’t come down that much so I walked.

The plane that I bought, a 1989 Bellanca Super Viking, passed the prebuy with flying colors.

So, in both cases, offer first, then prebuy. It’s okay to walk based on the findings of the prebuy. Nothing was signed wrt the offers. All verbal. I think lining up the insurance quotes and financing showed the sellers I was serious. Still think the 185 would have been a fun plane. But I love the speed of the Viking.
 
Typical process is that an offer is made (usually after seeing the plane, maybe a cursory review of logbooks, test flight) and that offer is pending a pre-buy inspection (which really should be an annual). Then depending on what’s found further negotiations happen.

Generally the seller pays for airworthiness items and the buyer pays for optional items. However as with any sale how that falls will depend on how shrewd of negotiators the buyer and seller are and how the market is.

I have bought or otherwise advised purchases with no formal pre-buy a number of times and it’s always worked out well. Keep in mind the planes were purchased at a reduced price from market value and the lack of a pre-buy was used to reduce the offer price.

I would never let an A&P, especially one I didn’t know, perform a pre-buy without an offer in hand.
 
When I found my plane it was out of annual for about a year. So the pre-purchase was an outright annual plus all of the missing SBs. I wrote up a purchase agreement that outlined contingencies based on the results of the annual. After over $11,000 worth of issues were noted, the Buyer initially refused an $11K reduction in the asking price. But his plane was 30 miles away on jacks and in a million pieces (also unairworthy). I told him he was gonna have to address these items one way or the other before it could be sold. After about a day of mulling over it, he agreed to the price.
 
I can’t think of any reason a seller would agree to an inspection other than a visual one without a firm price. It’s a waste of everyone’s time including the buyer. If you plan to offer $25,000 in this plane that is listed at $35,000, get that out of the way upfront before you spend $500-1000 on a pre-buy.
I understand not offering full price, but be aware some airplanes are actually priced right and they will sell quickly!
 
N747JB said:
I can’t think of any reason a seller would agree to an inspection other than a visual one without a firm price. It’s a waste of everyone’s time including the buyer. If you plan to offer $25,000 in this plane that is listed at $35,000, get that out of the way upfront before you spend $500-1000 on a pre-buy.
I understand not offering full price, but be aware some airplanes are actually priced right and they will sell quickly!
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Yeah. I sold the 414 in under 2 weeks for asking price, as is. I did throw in delivery to the buyers though.
 
Am I supposed to put a deposit down prior to pre-buy?
 
MooneyDriver78 said:
If you’re the seller, why would you let someone disassembled your airplane who may not even buy it.
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A deposit doesn't guarantee anything either. But in my case the airplane was out of annual (almost 2 years). He had to get it done whether I bought it or not (If he was serious about selling it). I paid him a small deposit and since I needed a pre-purchase inspection anyway I also offered to pay 1/2 the annual (not any required repairs) but had the option to decline the sale depending on the results of the annual. Ultimately, he was willing to reduce the selling price to account for all the items documented in the annual.
 
Cardiff_Kook said:
I generally don't offer asking price.

Sent from my Pixel 3 using Tapatalk
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If you want to buy a nice example of a currently-popular airplane, you'll need to be willing to pay asking price or more. Be ready to pay what it's worth to you, regardless of what the seller is asking. For most airplanes, it's a sellers' market and every seller knows it.
 
OneCharlieTango said:
If you want to buy a nice example of a currently-popular airplane, you'll need to be willing to pay asking price or more. Be ready to pay what it's worth to you, regardless of what the seller is asking. For most airplanes, it's a sellers' market and every seller knows it.
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Absolutely. I should have caveated this statement.

Comps I saw on trade a plan did not line up.

I also consulted with multiple people who know the market, as well as some that knew the actual plane in question, which has been for sale for a number of months. The consensus was it was overpriced.

I did not, nor would I, low ball someone. I have too much respect for other's time.

I think someone offering you 90%+ of asking is pretty reasonable in any situation, unless the price is listed as "firm" or "non-negotiable." The response can always be "no."
 
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FlySince9 said:
When I found my plane it was out of annual for about a year. So the pre-purchase was an outright annual plus all of the missing SBs. I wrote up a purchase agreement that outlined contingencies based on the results of the annual. After over $11,000 worth of issues were noted, the Buyer initially refused an $11K reduction in the asking price. But his plane was 30 miles away on jacks and in a million pieces (also unairworthy). I told him he was gonna have to address these items one way or the other before it could be sold. After about a day of mulling over it, he agreed to the price.
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Friend on the east coast just went through this drill and walked from the deal... the plane was two years out of annual and was only flown 3 hours sine the last annual... The pane was a little overpriced, but it was a good example og the aricraft with a low time air frame, mid time engine and Garmin 430W... in hindsight he thinks the owner held fast to the price so he could get it airworthy and walk away with his real asking price.. The inspection reviled a few AD's that needed to be looked after and the compressions we a little low...

When I bought my second plane the offer was; as is where is for X amount which was about 20% below the market.. To my surprise the seller accepted the offer.. kept it for two years put about 150 hours on it and sold for a profit... I wasn't concerned as the plane was meticulouas as where the logs

When looking for a plane and I have two questions that I ask... a.) why are you selling it... b.) what is my A&P going to find out when we put it through an annual prior to purchase...
 
airdale said:
Before, but the written version of the offer says something like: " ... offer is contingent on a pre-buy inspection verifying that the airplane has no defects that could affect its value." Or a similar escape clause that lets you walk for any reason. Nobody is going to take you to court if you walk on a typical GA plane, either. There is just not enough money involved.
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Small claims court is very cheap and effective (In my opinion the ONLY just court, usually no lawyers.) So if you can reasonably show breaking the agreement has cost you a certain amount of loss you might just be compensated. It has worked for me.
 
OneCharlieTango said:
What does the answer to that question tell you? What are good or bad answers? Serious questions, as I used to ask it but decided it didn't get me anywhere.
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There are no right or wrong good or bad answers, this is going to help me determine what my next questions are going to be... for instance

I am not using it anymore... not always the case, but this is telling me they lost interest in the plane and there may be some maintenance issue that will need to be addressed...

Moving up to a bigger plane.. this could open the door some all cash offer negotiations... Especially if that SR-22 is in the air on its way from MN.... :D

I am going through a divorce... OK, how are we going to conclude the purchase and where is your wife and/or husband on the price.

Need to pay off a loan... what loan are you paying off... is there a trust/lien/loan on the plane

I am selling it for a friend... that is very nice, but if you're not a broker, I want to deal directly with the owner...

Hope this helps
 
Snowmass said:
Small claims court is very cheap and effective (In my opinion the ONLY just court, usually no lawyers.) So if you can reasonably show breaking the agreement has cost you a certain amount of loss you might just be compensated. It has worked for me.
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I won a small claims case again a home improvement contractor...they never showed up... that was 12 years ago... still haven't gotten paid..
 
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