Airplane purchase process

Discussion in 'Pilot Training' started by FelipeNJ32, May 30, 2021.

  1. FelipeNJ32

    FelipeNJ32 Filing Flight Plan

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    I do not fully understand the process for purchasing an airplane. I have created this list based on what I've been reading online. I don't understand how to accomplish step 5, do I need attorney ? And how is step 8 is accomplished ?


    1. Airplane Appraisal
    a. AOPA VREF​
    2. Contact seller with questions.
    3. Insurance quote.
    a. Gallagher or BWI.​
    4. Pre-approved Financing
    a. AOPA
    b. US Alliance​
    5. Have a contract, sign it.
    6. Pre-purchase inspection by mechanic
    a. Differential compression on each cylinder
    b. Include analysis of spare parts market, i.e., difficulty in acquiring spare parts.
    c. Paint, check for corrosion under the surface
    d. Verify AD compliance
    e. Estimate ~$1,200​
    7. Aircraft logbooks reviewed
    a. for FAA Form 337
    b. AD compliance
    c. Service bulletins and letters
    d. Aircraft/component serial numbers
    e. Damage History (reoccurring?)​
    8. Title search (no liens) & Escrow
    9. ARROW documents are provided
    a. Engine and Airframe logbooks
    b. Aircraft equipment list
    c. Required placards
    d. FAR 91.419​
    10. Bill of sale – FAA Form 8050-2
    11. Register Aircraft – FAA Form 8050-1
     
  2. somorris

    somorris Pattern Altitude

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    AOPA has a contract form you can download and customize. They can also provide #8 if you want them to.
     
  3. AKBill

    AKBill En-Route

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    What plane are you looking to buy
     
  4. Datadriver

    Datadriver Line Up and Wait

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    if you are financing, the bank will force you to do step 8 and probably use one they know such as https://www.aerospacereports.com/
     
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  5. PeterNSteinmetz

    PeterNSteinmetz Pattern Altitude PoA Supporter

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    Usually the contact will call for you to place the purchase price with an escrow company who will release the funds subject to other terms, such as passing the inspection with no other major items wrong.

    This company can normally do the title search for you and offers title insurance as well.

    Nice book on buying and selling airplanes is available at https://www.amazon.com/Hamburger-Guide-Buying-Selling-Aircraft/dp/0615926991
     
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  6. asicer

    asicer Final Approach

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    Seems like step 6b should be much closer to steps 1-3 in the process.
     
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  7. FelipeNJ32

    FelipeNJ32 Filing Flight Plan

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    Maybe a piper or Cessna 172 60K-80k$. I feel like I really need to understand this before I start contacting anyone about a purchase. I don't know any finer details besides this generic list. The buyer downloads a sample contract from AOPA is the usual process? Scary process when you're not confident.

    The escrow part don't really understand, I somehow open one of those and put my down payment inside. Then I contract escrow company to release money when purchase is done? or bank handles it all. I perform title search and verify title is clean ?
     
  8. FelipeNJ32

    FelipeNJ32 Filing Flight Plan

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    Ok I download sample contract from AOPA (will need to locate and read). Step 8 I open Escrow account with likely https://www.aerospacereports.com/ which will handle verifying title is clean. Eventually somehow the bank will put money into that escrow (full price of plane), likely some paperwork from me triggers this. Once deal is finalized I contact bank and escrow to release funds.
     
  9. AKBill

    AKBill En-Route

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    Like posted above if you are financing thru a bank I think they will handle that. I bought my plane thru a broker 25 years ago and they had everything lined out. I payed for the plane with a certified check
     
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  10. Mycroft17

    Mycroft17 Pre-Flight

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  11. Bell206

    Bell206 En-Route

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    FWIW: I always recommend prior to purchasing an aircraft to select the APIA who will be maintaining your "new" aircraft. With the right person, they can assist you with some of the items on your list. But more importantly, having your mechanic involved with the purchase from the beginning goes a long way in preventing the surprises you may see after the sale when your new aircraft gets its 1st annual inspection.
     
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  12. L.C. Gray

    L.C. Gray Pre-Flight

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    Ours was simple... just fell in our lap and we filed bill of sale and registration change request... then waited... and waited. 3 months and it showed up
     
  13. Southpaw

    Southpaw Pre-takeoff checklist

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    My purchase of my old C172 was easy. Nephew gave me a heads up on it when he saw it in a online web site.
    It was fairly close so I called the fellow . Had a local fellow who worked at the same airfield take a look at it , wire transferred the funds , got insurance coverage , plane delivered to my local airport , signed the papers , own it . Had a hanger rented the day the 172 arrived.
    It seemed just to easy. The seller said he had 5 offers after he accepted mine and if I should want to part with it , he wanted first chance at it. (Dec. of 2019 )
     
  14. steingar

    steingar Taxi to Parking

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    I must be doing it all wrong. I gave money to the seller and he gave me an airplane. Might have arranged a pre buy inspection at some point. Says me only a fool borrows money to buy a toy. Might not be a popular view, but that's how it's written in the Book of Steingar.
     
    Last edited: Jun 2, 2021
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  15. Jeff Oslick

    Jeff Oslick En-Route

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    When you get the insurance quote, ask for an estimate quote based on the model, year and estimated hull insurance value. DO NOT give an N-number for the quote or you will be locked into that broker and not able to shop around. Insurance companies will not quote insurance on a specific aircraft to multiple brokers. They don't want you shopping brokers for price. Crazy system, but it's been that way for a long time.
     
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  16. Southpaw

    Southpaw Pre-takeoff checklist

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    When I first bought coverage it was from the same agency as my CFI used. The next year I contacted AOPA. They had no interest in quoting a policy. Perhaps it was the tail Number thingy ?
    Insurance for my 172 with $30,000 hull is @$3551.00
    Of course I'm 80 years old and still a "Student Pilot"
     
  17. Rgbeard

    Rgbeard Pattern Altitude

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    1) find plane
    2) find checkbook
    3) see plane
    4) write check
    5) fly
     
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  18. Jeff Oslick

    Jeff Oslick En-Route

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    Ouch, that is a painful $. Renewals work differently on the quotes. I think they just didn't want to quote a policy for an 80 year old student pilot.
     
  19. comanchepilot

    comanchepilot En-Route

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    Tell the agent - I'm looking for a type of aircraft and have not found one yet - this is how you game that system . .

    it's pretty hard to find a decently maintained and equipped and regularly flown aircraft . . . . its usually pick any two.

    Like with my Comanche 260C - range, speed payload - I've got all three - there are TWO piston singles that get you that - the Bonanza and the Comanche and the Comanche generally does it for $50-100k less of similar vintage and equipment. . .
     
  20. Tantalum

    Tantalum Final Approach

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    Wow, those steps seem like a lot of work. Is it not possible to just offer cash and walk away with the keys and the title? Am I naïve?

    People get bent out of shape over prebuy things and complicate every aspect of their life.. but I have to ask "dude, it's a 50 year old airplane, what do you expect??" .. "gee I don't know, the compression on one cylinder is under 70, should I be worried that it's 68??" give me a break. Go fly it, give the logbooks a review, and give the guy the money and walk away with the key. Your first annual is going to suck, be ready to spend a lot the first time around

    ..maybe if a plane has been sitting a while it makes sense to do some more homework. But if the plane is flying somewhat often (once a month at least, say) then personally I'd be fine just buying it outright


    Also.. financing an airplane also seems like a horrible idea. If you can't find something you can buy in cash, and afford the maintenance in cash.. then it's not your time to buy yet. Or find a few people and buy it with a few friends. I knew lots of people who go in on planes together. 2 or 3 owners surely helps mitigate the costs. I had friends in the east coast who bought a 172 together, 3 of them. They treated it like a dry rate rental and put away something like $40 per tach time
     
  21. Tantalum

    Tantalum Final Approach

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    I certainly prefer the Comanche, but older Mooney have decent payload too. But the Comanche is more pleasant to fly.. a refined Mooney so to speak
     
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  22. idahoflier

    idahoflier Cleared for Takeoff

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  23. idahoflier

    idahoflier Cleared for Takeoff

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    OP: One option you could consider is to hire a reputable broker. It's probably not cheap, but in the end it could give you some peace of mind...
     
  24. Tantalum

    Tantalum Final Approach

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    It seems like that guy did everything right and then all of a sudden the airplane was a flying disaster. Something with the story doesn't make sense.. he did all the right steps and had several smart people apparently sign off on it, then it goes to annual and there's all this serious trouble with the plane that it's surprising anyone missed?

    That plane was 60 years old.. unless it was lovingly maintained its whole life (which, as a PA-28, it probably was not), I'm not at all surprised
     
  25. Deelee

    Deelee Cleared for Takeoff

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    Went through this process last year. Here's how it went (in two acts):

    ACT I
    • Found a nice Arrow through word of mouth on this site
    • Met seller. Flew aircraft with partner
    • Liked aircraft
    • Found contract on AOPA's website that has been referenced above
    • Hired a not-to-be-named service to walk us through the prebuy process
    • Prebuy turned up a few issues (shocker here.... a 1969 airplane had a few squawks)
    • Prebuy service advised us to have seller fix aforementioned issues
    • We couldn't come to terms, everyone parted ways amicably (I think??) and we were out the money to do the prebuy. Retrospectively - we probably passed on a pretty nice Arrow.
    ACT II
    • Spent hours and hours looking on TaP and Barnstormers for another Arrow
    • Finally found one on Barnstormers
    • Called seller. Exchanged lots of emails with seller. From seller, got digitized copies of all logs and even the complete digitized history of this aircraft's paperwork that was submitted to the FAA since 1969. Got a good vibe from seller. Seller sent lots of pics. Seller was a good guy. We are good at determining who is a good guy and who isn't, we think.
    • Arranged for a prebuy by an independent shop near seller (couldn't use anyone local since airplane was out of state)
    • Prebuy turned up some squawks (the horror!! Issues with a 50 year old piece of machinery??)
    • Seller agreed to fix most squawks. Seller personally (with a broken thumb) worked along side the shop to fix some of the issues (seller is an A&P/IA, by the way)
    • Partner and I drove through several states in a rental car to pick up airplane with a check made out to seller
    • Partner and I met seller. Test flew aircraft.
    • Handed seller the check and seller handed over complete logs, all meticulously maintained paperwork on the aircraft and the keys
    • Seller also handed us several signed bills-of-sale (you can download these from the FAAs website here -https://www.faa.gov/documentLibrary/media/Form/ac8050-2.pdf) This is the only document you really need to transfer ownership, by the way.
    • Partner and I flew back to home airport (in IMC much of the way)
    • And lived happily ever after.
    It doesn't have to be complicated. Things I do recommend (they have been mentioned before, but... since I'm typing....)
    • DO get someone to look at the airplane before you buy it. Your A&P would be great. If not, then have someone not associated with the airplane/seller look at it. They should probably have experience working on the type of aero-plane you are buying. Or at least be able to spell aeroplane.
    • DO look at the logs. You can learn a lot about how the aircraft was maintained, how many hours per year it was flown (DO make sure that the airplane didn't sit without the tach time increasing for years on end...). You can also learn from the logs that A&Ps in the 1970s used really cool cursive that kids these days can't read.
    • DON'T use a prebuy service. This may be controversial, but this was our experience. The shop we used to do the prebuy on the first attempted purchase groaned and rolled it's eyes when we said we were using a not-to-be-mentioned prebuy service. They said - "Oh great. Those guys. They are gonna nit pick every little thing and micro-manage this process to the point where you are going to have a list of must-fix issues a mile long....."
    • DO test fly the airplane. You wouldn't buy a car without test driving it, would you? Maybe you would. I dunno. We test flew it. I recommend it.
    • DON'T overcomplicate the process. But DO what you need to do in order to make yourself feel comfortable with the purchase. If you want a contract, go on AOPA and get one. Or, if you are going through financing, they will probably have one that you will use and walk you through that process. That includes escrow and title search. We didn't finance. But hey, it's a free country and if you love aeroplanes and want to take out a loan to get one - go for it.
    • DON'T get a 172. The wing is in the wrong place and they are way overpriced unless you are opening up a flight school. You can do better. I know it's what you learned in. But you wouldn't buy an adult bike with training wheels, would you? How about a nice Bonanza?
     
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  26. idahoflier

    idahoflier Cleared for Takeoff

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    Yeah, I agree, it sounds like there is more to that story...
     
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  27. Tantalum

    Tantalum Final Approach

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    YES YES YES A MILLION TIMES YES!
     
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  28. comanchepilot

    comanchepilot En-Route

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    As a soon to be seller of an aircraft - it IS 2021 - and scams and the clueless abound -

    If you are selling [or buying] an airplane - there is too much BS out there in the world - tire kickers, lookiloos etc etc

    In this day and age I think you need to first identify the aircraft you want - if you want a Comanche - then find a Comanche. Or an Arrow - or whatever. Then what you really want - my requirements are a 2 axis AP, GPSS, coupled 530w and an HSI. Thats a cross country machine because my typical stage length is 350-550 miles. So I'm not wasting my time on an airplane with steam gauges that are 40 years old. It's a 30 secnd process - look at the panel and in most cases move on.

    You don't need the log books going back to the stone age [you want to HAVE the log books going back to first rivet, but that doesn't mean you have to look at all of them right now] = check out the last 5 - 7 y ears.

    Because here is a tip - you're looking for the maintenance hogs - you want to see how many things get fixed BETWEEN annuals - a good annual inspection finds everything - the repairs are what you want to see - a hangar queen has everything going wrong all the time - it'll be easy to see. My airplane basically has oil changes and the annuals the last ten years- its a good honest well flying airplane.

    If you have a second log book for the propeller starting in 2014, and nothing but annual signoffs- guess what - you're ok. You don't really need to inspect the other book before the due diligence period - you should - but not at THIS stage.

    At this point - you need to make an offer and put down some earnest money - you need to convince the seller you're not a flake. I've got supposedly one buyer - all he does is ask a question, gets the answer, asks a follow up question and I told him last week I was done - he's seen the airplane, spoken to the mechanics who worked on it since 2011, seen logbooks since 2010 - its time to make an offer and start the process - I'm not wasting my time dicking around with someone who one day is interested and the other ghosts us. He wanted to see a photo of the seats I've removed - ok - prove I still have them - makes sense - but then to ask to see a photo of the baggage hold? WTF is that about? How big it is? It's a Comanche C - they're ALL THE SAME SIZE.

    The airplane has been flying the last decade on those scanned log books - you've seen the AD list and compliance dates, everything else is maintenance. We have all the logs - even for the old motor - why would anyone want to see that one? A seller needs to get off the pot after a week or two - you'll know within a day if the seller is FOS - if you want to see all of the logs going back to 1971 - you're welcome to come inspect them or pay to have them copied. We have the logs scanned going back to the $15,000 annual in 2010 when EVERYTHING was gone through with a fine tooth comb - from that forward you basically had a new airplane in terms of condition.

    Plus - if you want a pre-buy inspection [which should be an annual INSPECTION - remember - its an INSPECTION - you don't have to fix anything] you have to agree to pay for it - you can't ask a seller to possibly incur your debt if you flake and walk away [because if a mechanic does work on an airframe the owner of the airframe is liable to pay - unless the owner can shift that cost to someone else] remember -t;s 2021 and flakes, scam artists and everyone else is out there - you need a written promise to pay. At that point - you obviously are interested in the airplane - make an offer. Otherwise - don't waste my time playing the ask a million questions game - do YOUR due diligence on potential squawks - and you should ask your questions in WRITING. This way you have a paper trail.
     
  29. comanchepilot

    comanchepilot En-Route

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    Oh, and PS: you need to understand that a seller is not obligated to fix every little thing your pre-buy service uncovers. If all of the airworthiness squawks are repaired- thats the best you can hope for. It's a used piece of machinery. You can ASK for a perfect used aircraft to be sold to you, but you will be paying a heckuva lot more than for a normal aircraft in normal condition - its like noticing that a few post lights are out on the panel and dinging the airplane $1000 of value for that - its not reasonable and it shows bad faith on the part of the buyer. I had one situation where a buyer wanted me to replace [replace - not tighten] screws that had vibrated out of the interior panels - uh, no. I offered that gentleman his deposit back and suggested that if his pre-buy service was niggling to that level that perhaps he needed to buy a new aircraft . . .
     
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  30. Randomskylane

    Randomskylane Filing Flight Plan

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    So FAA registration is pretty good good proof of ownership (no liens found?) The bill of sale from 1984 isn’t important any longer? TIA