Lost a plane by not offering asking price

bcool

bcool

Pre-takeoff checklist
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Bud
I lost buying a nice Lance by making an offer less than the asking price.

When I did an AOPA Vref valuation (using extremely detailed equipment settings based on the airplane's logs) the valuation was $36,000 (27%) lower than the asking price.

I really liked the plane but I didn't want to overpay by that much so I made an offer between that and the ask (much closer to the ask than the other way), but somebody else offered the full price & I lost it.

So, I guess the moral of the story is...if you like the plane and you don't mind taking a chance on losing a bunch when you sell, pay the asking price :)

In retrospect, I suppose the asking price wasn't out of line with what other Lances are listing for, but it just shocked me that there was such a big difference from the Vref value. Oh, well...I'm sure another one will come up so I can try again :)

On another topic, this particular plane didn't have any of the corrosion-related service bulletins performed. I wanted to put those in the pre-buy but I have a feeling sellers aren't going to want to take the risk of anything showing up. And that worries me, what with all the hoopla going on with the wing spar AD on the horizon. What to do, what to do??
 
Don’t beat yourself up. I was in love with an Archer, made an offer, and the prebuy discovered a bunch of engine corrosion. Seller did an overhaul and wanted me to pay half; I walked away. I found my Arrow shortly thereafter and am glad I don’t own an Archer :)
 
i’m not buying a plane and i’m certainly not arguing with your offer or reasoning (i’m with you on both counts) but it seems to me that comparable listing/asking prices are not the measure for valuing something. what the item finally sold for is the true value of the item. are final selling prices displayed on internet listings?
 
Let’s say the seller comes back next week and says the deal fell through. You gonna pay asking then?
 
bcool said:
I wanted to put those in the pre-buy but I have a feeling sellers aren't going to want to take the risk of anything showing up.
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I don't understand that part.
 
Don’t let you emotions overcome common sense. If someone else is willing to take the gamble that’s on them. I’m seeing a lot of planes selling for crazy prices lately. No doubt a lot of them will become ramp queens.
 
midlifeflyer said:
I don't understand that part.
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Well, let's say they agree to me paying to have those SBs done during the prebuy. Then, whoops, major corrosion shows up so I back out of the deal - and now, they'll have to pay to fix it or hide it from the next buyer. I'm thinking most sellers would pass on allowing me to do the SBs and wait for a buyer who doesn't know about them or doesn't care.
 
bcool said:
So, I guess the moral of the story is...if you like the plane and you don't mind taking a chance on losing a bunch when you sell, pay the asking price :)
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I would spin it a different way: Mentally decide on the price (or prices if you aren't certain of the condition/contingencies) you are going to pay ahead of time, be prepared to walk away if you don't get it and get a firm commitment from the seller if you do.

Sounds like you made an offer, the seller said "let me think about it" and then someone else came along while things were still not committed?
 
rk911 said:
i’m not buying a plane and i’m certainly not arguing with your offer or reasoning (i’m with you on both counts) but it seems to me that comparable listing/asking prices are not the measure for valuing something. what the item finally sold for is the true value of the item. are final selling prices displayed on internet listings?
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The trouble is, we never know what planes actually sell for. I'm having trouble convincing myself if I should pay X for something that's theoretically valued at X minus some large amount. While I could have afforded the asking price, to me it would be fiscally irresponsible if I bought something today that could conceivably be worth $36,000 less right off the bat when I sell it. Unless I could find someone else willing to go high like I did, that is...

I guess what this is telling me is that there are way more buyers than sellers of well-equipped Lances out there and I need to get a price in my head for what I'm willing to pay and just go with that and don't worry what the future resale value might be.
 
asicer said:
I would spin it a different way: Mentally decide on the price (or prices if you aren't certain of the condition/contingencies) you are going to pay ahead of time, be prepared to walk away if you don't get it and get a firm commitment from the seller if you do.

Sounds like you made an offer, the seller said "let me think about it" and then someone else came along while things were still not committed?
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Yep.
 
And another thing...I'm thinking when the next plane I'm interested in shows up I should make an immediate offer up to my comfort level so nobody else can sneak in after me (subject to conditions, of course). I took a full day doing my due diligence before I made my offer, what with reviewing the logs, doing the Vref calculation, etc. That way I can be assured to get it at my price, if they accept it and it checks out OK.

I guess I was thrown for a loop by the big discrepancy between the ask & valuation and I was trying to mitigate that, but after thinking things over post mortem I would have been OK offering the asking price. I hate being a buyer in a seller's market - it seems like I'm always on the wrong end of the demand curve no matter if I'm buying or selling anything :dunno:
 
Your strategy should dictate your purchasing methodology. Once you commit it’s the best outcome if you stick to it. IMO you did the right thing if it was your strategy and you stuck with it. I’m sure you put a lot of time and effort to get to a number that worked for you. Does it payoff every time. No but when it does it pays off for you. If anything learn from this experience and apply it to the next.
 
When I bought a year and a half ago I spent the 6 months prior comparing ads to vref. Anything at or under vref seemed to sell quickly. Some listings over vref never sold the whole time I was looking. The plane I bought was listed at 125. Vref 167. Purchase price 100. Seller was in it right, a little behind the market and I had cash. We still talk, he’s a great guy and jokes that he sold her too cheap. This was not a Lance but if you follow the market and are ready to jump you’ll find the right one. I’m a big believer that the buyer is in charge, most of the time.
 
vref is a useless metric. The cost of high performance singles has zoom climbed after basic-med got passed and since the economy soared pre-covid. Look at the market for equitable pricing and expect to pay at or near asking price.

There were 18 people in line behind me to buy my Skywagon and I paid asking price, and still got a good deal.
 
Vref is a starting point but I found it to be below true market on Lances. I also don't think it takes a lot of little details into account like club seating for example. It also doesn't give you credit for a lot of possibly dated but still desirable/useful avionics.
 
VREF has a lot of variability to it (depending on how you view the aircraft will raise or lower its value compared to how the seller sees it, etc.) I used VREF a couple of times and discounted accordingly for flight use (if it was used in a flight school) and condition (especially if it was tied down outside.) I insulted quite a few sellers unintentionally. But I did get a plane (the plane in my Avatar) and my price. Just took time (about 2 years in my case.)

Point is, the right plane will come along. This one may have been a beauty, but there's probably another Lance that is probably as nice as this one was and maybe for your asking price or closer to it.
 
I don’t know the plane but there a 75 straight tail in Monroe, wa for sale on fb for 65k

Seemed like a decent deal on the very surface. Engine was high time


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Buying airplanes, especially if you are particular or want a less-common type, can be expensive, time-consuming, heartbreaking, frustrating.
 
bcool said:
Well, let's say they agree to me paying to have those SBs done during the prebuy. Then, whoops, major corrosion shows up so I back out of the deal - and now, they'll have to pay to fix it or hide it from the next buyer. I'm thinking most sellers would pass on allowing me to do the SBs and wait for a buyer who doesn't know about them or doesn't care.
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I guess what I didn't understand was whether one could practically examine for what is addressed by those SBs during the course of a pre-buy without worrying about whether the seller agrees to anything more than a normal pre-buy which returns the aircraft to the same condition it was before.
 
midlifeflyer said:
I guess what I didn't understand was whether one could practically examine for what is addressed by those SBs during the course of a pre-buy without worrying about whether the seller agrees to anything more than a normal pre-buy which returns the aircraft to the same condition it was before.
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Well, if your mechanic finds corrosion, and puts the thing back together, there will be a record of that, so I'd certainly get some assurance on to what would happen if the worst was to be found. I sort of got caught up in such a deal decades ago, where the engine had been recently (hour-wise) overbored, but pulling a jug revealed that the "freshly" bored cylinders had worn past their limits. Owner just had it put back together! I walked away.
 
Logbook search including SB’s. SB’s not done I am walking. If the owner was not doing them I can assure you there were a lot of other things he was not doing.
 
When I was buying a Bo a few years ago I ran into the same thing. I would get into work and print off any ads that look good to call on after work. I quickly realized that the good ones were gone before I could call and were sold for ask for very near ask. I eventually had to hire someone that could make long calls during the day and weed out the bad ones. Even then that didnt work. Found a good basic N35 for the correct price, made an offer and paid for a mechanic to look at it. Even though the owner said he flew it the day before, the battery was dead, the starter was frozen and had to be replaced and there were damage to the wings from a extremely hard landing that wasnt repaired correctly. The owner ran out and got a new starter, and still there were issues that "werent there yesterday", like AP that wouldnt work, etc.. I paid the mechanic for his time, even though he was there all day he charged me what he quoted me for a few hours of his time, for a plane that was no way what was stated on the phone or in the ad.

I learned to watch the ad's and ignore the stupid high priced ads and the projects and got a feel of what a average price was. That was easier for me to pull the trigger. the hard part is when someone prices a plane like it should be but overstates the ad. Hard to go through all of that and find out in pre-buy or worse, the first annual, that the owner was selling because werent keeping the plane maintained and hoping to unload it.
 
Do all the pre-buy homework, and buy what makes you feel “really good”. Buying is just the beginning. If you don’t feel good about it, you will not enjoy the ownership of it after. I can never “financially” justify my ownership, but I love my airplane. By the way, while I was doing too much homework, I, too, “lost” her at first; but she became available again several months later. Best wishes on your search for the right airplane!
 
bcool said:
corrosion-related service bulletins performed. I wanted to put those in the pre-buy but I have a feeling sellers aren't going to want to take the risk
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Your assumption would mostly be correct. And if I recall correctly most of those corrosion SBs require a bit of disassembly and in some cases an alteration. As an alternative, perhaps discuss with your mechanic creative, non-evasive ways to see if you can at least review those areas of concern with a borescope or something.
bcool said:
The trouble is, we never know what planes actually sell for.
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And we never will. Too many variables down to the person who simply buys an aircraft “because it looked lonely.” No algorithm will ever pick up on that scenario plus the fact a number of aircraft sales never make it into any data sets.
 
After buying and selling three planes in the last year I’ve found that VREF is not very accurate. For example, I purchased a really nice 1963 Cessna 205 last year. It was basically equipped but pretty much looked like it rolled out of the factory. Owner wanted $95k but my finance company would only authorize $61k based on vref. I had it independently valued by a reputable professional and it was valued at $98,500. I paid $95k and had full support from finance and insurance based on the valuation. Around six months later I sold it to move into a T210, had it appraised myself before putting it on sale and got $108,500 based on a $108k appraisal (I’d added some Avionics etc). I learned a few things from this:
1) vref does not reflect market and the market always speaks, especially with cash buyers
2) if there isn’t an independent appraisal on an airplane that is somewhat outside of vref, get one. If you’re selling, just spend the $500 and get a stamped appraisal so there’s no (or less) dickering in the sale.
3) buy your last airplane first lol (I say with a grin as I’m already planning the next purchase )


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Kenny Phillips said:
Well, if your mechanic finds corrosion, and puts the thing back together, there will be a record of that, so I'd certainly get some assurance on to what would happen if the worst was to be found. I sort of got caught up in such a deal decades ago, where the engine had been recently (hour-wise) overbored, but pulling a jug revealed that the "freshly" bored cylinders had worn past their limits. Owner just had it put back together! I walked away.
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The typical pre-buy clause in a sales agreement is like the inspection clause when buying a home. Pretty much a walk-away.
 
vRef is great for newer planes, but not so accurate for old planes. Province matters at lot and overall intangibles are important that vRef does not account for in the valuation. A gentleman on my field sold his 67 182 $25K over vRef and had 3 people competing for it, and 3 more who were mad they didn’t get a crack at it. Single family ownership, original paint that looked like it was painted yesterday. He should have run an ad instead of casual word of mouth, Hwa would have gotten more.
 
I wouldn’t count on VRef as the ultimate decision maker when buying an older airplane. Do the comps of the major publications ,popular models can demand higher prices. If your happy with the price you pay for an aircraft,then it’s the right price.
 
NealRomeoGolf said:
OP, not to make you feel bad, but I think I just nabbed a good Lance. Probably overpaying....but it's just money, right?
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The purchase price but a tiny piece of all that goes into ownership.
 
If you aren't prepared to walk away, then don't walk into a deal. There will always be another airplane for sale.

The market value is what someone eventually pays for the airplane. The only things that matter are 1) you buy it for what you're comfortable paying. A bonus is that you can probably sell it eventually for what you paid for it. But hey, owning an airplane is an expensive hobby that cannot be financially justified to start with.
 
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