Buying an LSA - Process

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dcotton

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Don
Guys- a partner and I are going to be buying an LSA around the $100k price point.

Should we be using a lawyer, escrow service etc, when buying from a well known broker or dealer? In general what does a "typical process" look like when buying a plane?

Offer, deposit (how much), escrow balance, title search, inspection?

Newb to this, trying to figure it all out.

Thanks!
 
I've sold a used and a new LSA. The procedure is the same as any other airplane, so go to the AOPA website and search for their checklist. I'm a believer in using a title search company for holding funds in escrow pending your pre-purchase inspection. Short version, agree on a price and a deposit, put it in a purchase offer, place the deposit in escrow with a copy of the agreement and instructions for distributing the funds (when and how). Then have the plane inspected by an LSA-savvy mechanic. Or something like that... :)

dtuuri
 
Going through the same process right now but with a C185.

Seller pays for your AP IA to do a prebuy / annual

Order the records CD from the FAA, his will have the title history, liens, 337s etc.
http://aircraft.faa.gov/e.gov/ND/

Print up a AOPA purchase agreement, modify as needed.

Give the seller a deposit. Signed recipt, no buy due to prebuy = refund.

Bank check for balance if everything checks out.

Fill out FAA slip, really not much to it.

Add gas and fly

I've never used lawyer or escrow, just use some common sense and find a good AP who knows the type.
 
James331 said:
Seller pays for your AP IA to do a prebuy / annual
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That's not a given.

When buying, I generally paid for an annual. If it came up showing a dog, it was money well spent. If it came up with anything significant but not disqualifying, it was a negotiating point.

As a seller, I doubt I'd pay for a buyer's inspection - but I guess it depends on how motivated the seller is.
 
If I'm a seller, I'm not paying for YOUR inspection/annual. Sorry.

As for the buying process, there is no standard. Once you agree on price, I would put the inspection at the very beginning. If it passes that, then the paperwork is a formality. Deposit is also variable. I would say 1-2%, in an escrow account which is refundable in the event the plane doesn't pass inspection or there are paperwork discrepancies.
 
FastEddieB said:
That's not a given.

When buying, I generally paid for an annual. If it came up showing a dog, it was money well spent. If it came up with anything significant but not disqualifying, it was a negotiating point.
Click to expand...

Ditto, we paid for a few annuals, kissed a few frogs. No way am I buying an annual for a potential purchaser.
 
Thank you everyone. I am taking the advice offered here and we are going to use the AOPA Escrow title service company.
Much appreciated.
 
Make sure the engine is checked out. Best to BE THERE and observe the compression check (look at the numbers yourself) and tell the mechanic NOT to influence you and the seller should not be present. Sometimes the seller and the mechanic know each other. Most of the LSA's have the smaller engines and a different mfg so make sure you find one that knows how to work on those. They are very different.

Most of the rest of the stuff you can check. LOok at the logs, you want inspections back to the beginning. Look at the plane for rust. Make sure all the avionics and lights work. Brakes tires etc. Look for oil leaks AFTER the flight (put a paper towel under that plane after the test flight and see what drips). Open up a few inspection holes and look for rust or whatever else is up there. Just poke around. Look for repaired damage.
 
Find someone locally who has bought and sold a few planes and get him/her to mentor you through this process. Also, since you're sharing ownership, go here and read. Also, read this and get an aviation attorney in your area to help draft the paperwork including the terms of your agreement with your co-owner/partner.
 
FastEddieB said:
That's not a given.

When buying, I generally paid for an annual. If it came up showing a dog, it was money well spent. If it came up with anything significant but not disqualifying, it was a negotiating point.

As a seller, I doubt I'd pay for a buyer's inspection - but I guess it depends on how motivated the seller is.
Click to expand...

It does depend on how the plane is described and if the seller honestly want to sell the plane, vs just listing it as "for sale"

You tell me the plane is a 9/10 or 10/10 nothing wrong, I show proof of funds, deposit (to have some skin in the game) you annual it (no biggie if it's really a cream puff) and address any issues MY A&P IA finds. Option two, my money and I walk. More people want my money than your plane.

If it's a iffy one that's diffrent
 
I've only purchased two aircraft and sold one. Both were cash sales, no escrow. Decent down payment, cash on delivery. First was was bank draft, others bank transfers.
 
What kind of LSA and what engine? Rotax? Some A&P are competent on LSA and many are not. Some do not understand the way LSA (I'm talking SLSA and ELSA) deal with service letters/bulletins, etc.
You may find it useful to see if there is a type users group and ask that community for suggestions, as well.
 
docmirror said:
If I'm a seller, I'm not paying for YOUR inspection/annual. Sorry.

As for the buying process, there is no standard. Once you agree on price, I would put the inspection at the very beginning. If it passes that, then the paperwork is a formality. Deposit is also variable. I would say 1-2%, in an escrow account which is refundable in the event the plane doesn't pass inspection or there are paperwork discrepancies.
Click to expand...

I paid to have an inspection for the plane I bought. You can juggle numbers however you want, but the bottom line is if the plane is worth (to you) all the total costs involved.
 
I've purchased two LSA's and it's just like buying a car.

1) ask a lot of pertinent questions.

2) have a good mechanic check it out.

3) negotiate in good faith.

4) if 1-3 satisfy you, write a (big) check. If not, walk away.
 
rbridges said:
I paid to have an inspection for the plane I bought. You can juggle numbers however you want, but the bottom line is if the plane is worth (to you) all the total costs involved.
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Why are you quoting me? I paid for the inspection on all the planes I bought too.

Have a nice day.
 
I find it hard to believe a buyer would expect a seller to pay for a annual/prebuy. You might have half a dozen annuals on a plane before a buyer actually ponied up the funds. However I would be willing to negotiate on anything found during their prebuy inspection.
 
Theboys said:
I find it hard to believe a buyer would expect a seller to pay for a annual/prebuy. You might have half a dozen annuals on a plane before a buyer actually ponied up the funds. However I would be willing to negotiate on anything found during their prebuy inspection.
Click to expand...

That's been the deal with the last two planes.

This is after reviewing the logs, going over the entire plane (de-cowling etc), NTSB search, FAA CD, test flight, agreeing on numbers, signed purchase agreement and deposit.

These were also on planes that were said to be perfect, as long as nothing is written up and not taken care of by the seller, the plane was sold.
 
I have paid for pre buys and annuals on all the planes I've purchased. It's the cost of doing business. Looking at the logs only shows what someone,reports was supposedly done. You probably negotiated a fair price for the airplane,why would you ask that the seller pay for the annual.
 
Make offer on airplane assuming there will be no problems with prebuy inspection. Provide a deposit. The conditions should state that if a problem is found during the inspection AND the seller is not willing to pay to fix those issues then the deposit is refunded to you.

Buyer pays for inspection. If buyer finds something seller won't fix buyer walks away with their deposit.

Pretty much the same thing as buying a house.
 
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