Pre buy and negotiation

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asgcpa

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My group has made an offer on a SR22. We are in the negotiation phase. Once we agree on a price subject to prebuy, it will go into prebuy.

What are the specific steps at prebuy? Once we get the squawks, it's my understanding they bifurcate between important and not important. The airplane just got out of annual so I am assuming (maybe wrongly) that it is airworthy.

How do you adjust price once you get the list from the prebuy shop? Also, please kindly keep on topic.
 
I'd say if an item is an airworthiness issue, should be paid for by the seller.

Otherwise, it's just nice info to have.

Then again, if you can negotiate that the seller pays for non-airworthiness items, all the better!
 
On mine, the seller was to pay for all airworthiness items. I was to pay for all of the niceties (Plane was correctly represented as in excellent shape). We did the annual process. Once the annual report was submitted, we signed it and the rest is history.
 
Anything misrepresented or not airworthy is re-negotiable, outside of that, hey, you're not paying for a new plane.
 
I had the seller agree to pay for up to 5k worth of airworthy or non airworthy issues. Contract specified that if repairs (airworthy or non) totaled over 10k then i could renegotiate price or walk and get my deposit back. I ended up buying the plane and had him pay for a full 5k worth of small squawks. I paid for the rest of the small repairs.
 
The owner usually pays to make the aircraft airworthy,after that the negotiations begin. I hope your not using the owners mechanic for the pre buy.
 
asgcpa said:
My group has made an offer on a SR22. We are in the negotiation phase. Once we agree on a price subject to prebuy, it will go into prebuy.

What are the specific steps at prebuy? Once we get the squawks, it's my understanding they bifurcate between important and not important. The airplane just got out of annual so I am assuming (maybe wrongly) that it is airworthy.

How do you adjust price once you get the list from the prebuy shop? Also, please kindly keep on topic.
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Everything is negotiable. And depends on who is more motivated to close the deal.
 
asgcpa said:
What are the specific steps at prebuy?
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There are none. there is no specific directions or required items for preforming a Pre-buy inspection.

It is what you want it to be.
 
asgcpa said:
My group has made an offer on a SR22. We are in the negotiation phase. Once we agree on a price subject to prebuy, it will go into prebuy.

What are the specific steps at prebuy? Once we get the squawks, it's my understanding they bifurcate between important and not important. The airplane just got out of annual so I am assuming (maybe wrongly) that it is airworthy.

How do you adjust price once you get the list from the prebuy shop? Also, please kindly keep on topic.
Click to expand...

A good prebuy is a annual on steroids.



Everyone is different, some folks go in with their butt pre lubed, some don't.

Airworthy is just the start of a prebuy, I'm agreeing on price based on condition, shy of me buying a project I expect the aircraft to be airworthy, that's a given, other things come up too though, everything from paint condition, upholstery, radios, etc.

If you agreed on buying the plane for XX and it's a 9/10, it should be a 9/10, I've seen some sellers use old photos before he lost his hangar and let the plane cook outside, in that case I deducted the price of new paint, new glass and new interior.

I like to find a fair price based on the prebuy, hit him considerably below it and work my way up to not exceed said fair price.
 
asgcpa said:
My group has made an offer on a SR22. We are in the negotiation phase. Once we agree on a price subject to prebuy, it will go into prebuy.

What are the specific steps at prebuy? Once we get the squawks, it's my understanding they bifurcate between important and not important. The airplane just got out of annual so I am assuming (maybe wrongly) that it is airworthy.

How do you adjust price once you get the list from the prebuy shop? Also, please kindly keep on topic.
Click to expand...
To me, it comes down to whether or not the airplane is as-represented or not. That does not mean squawk-free based on the opinions of 1 person vs another as to what represents a squawk. There will be a list of discrepencies from this inspection. And the next one. And the one after that. Personally, I hate the idea of continually re-negotiating price line-line for specific small items. It's a used plane. Just offer what you want to pay. The seller will take it or leave it.
 
I negotiated the price and sent a deposit with the option to walk away at ANY time and subject to a pre buy.

We settled on the price based on it being as represented.

I had the A&P do a three step process with orders to stop at any point if things do not look good but to keep going if it passes without significant problems.

1) log book review
2) pre buy inspection
3) full annual inspection

I paid for a pre buy with an independent A&P to see if it was even worth it. Once it passed the pre buy sent it through a full annual. During that process found a few airworthy issues and few non airworthy issues. After a quick negotiation seller deducted the airworthy issues from the price, I paid for the annual and non airworthy issues and all parties were happy.

Had I not spent the extra $600 to take it to a full annual even though it was only 6 months from its previous annual I would have left close to $3k on the table that I would have been on the hook for.

My transaction was easy peasy without a lot of complicated contractual if/then's. I knew I was on the hook for the inspection costs but I could walk at any time for any reason with a full deposit refund if issues did pop up and we could not agree on the terms
 
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James331 said:
A good prebuy is a annual on steroids.



Everyone is different, some folks go in with their butt pre lubed, some don't.

Airworthy is just the start of a prebuy, I'm agreeing on price based on condition, shy of me buying a project I expect the aircraft to be airworthy, that's a given, other things come up too though, everything from paint condition, upholstery, radios, etc.

If you agreed on buying the plane for XX and it's a 9/10, it should be a 9/10, I've seen some sellers use old photos before he lost his hangar and let the plane cook outside, in that case I deducted the price of new paint, new glass and new interior.

I like to find a fair price based on the prebuy, hit him considerably below it and work my way up to not exceed said fair price.
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What you really want to know is, what will it cost you to get the annual and discrepancies repaired at the next annual cycle. plus does every thing work properly.

beyond that there are no warrantees.
 
Tom-D said:
What you really want to know is, what will it cost you to get the annual and discrepancies repaired at the next annual cycle. plus does every thing work properly.

beyond that there are no warrantees.
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I've always gotten everything done at that cycle, next annul should be more or less trouble free shy of having a poor AP on your prebuy.
 
Send a PM to SixPapaCharlie He's a fairly new Cirrus owner.
 
As in all the airworthy or other snags that can be fixed there, other stuff put on a short sched, next annual all the noted snags from the prebuy are already done, presuming I pulled the trigger on the plane.
 
James331 said:
As in all the airworthy or other snags that can be fixed there, other stuff put on a short sched, next annual all the noted snags from the prebuy are already done, presuming I pulled the trigger on the plane.
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A pre-buy for a J-3 and the GIV same same right?
 
Arnt we are talking about single engine piston planes here Tom?


And to a extent yes, it's verifying stated condition, if it's not in stared condition it's about getting it there for the sale, and deducting money so you can get it there.
 
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asgcpa said:
My group has made an offer on a SR22. We are in the negotiation phase. Once we agree on a price subject to prebuy, it will go into prebuy.

What are the specific steps at prebuy? Once we get the squawks, it's my understanding they bifurcate between important and not important. The airplane just got out of annual so I am assuming (maybe wrongly) that it is airworthy.

How do you adjust price once you get the list from the prebuy shop? Also, please kindly keep on topic.
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As said, all terms can be negotiated.

If it were me, then I would ask that the inspectors findings be split into airworthiness issues, significant maintenance issues, cosmetic issues.

My purchase agreement would say that the seller is financially responsible (parts + labor costs) for the airworthiness issues. Significant maintenance issues would be discussed and an acceptable split determined. Cosmetic issues would be my responsibility.
 
I know it sounds crazy but I've never had a prebuy done by a professional on any of the 20 or so planes I have bought. I peruse the logs myself and check over the airplane myself. Usually the logs tell a pretty good story. I've really never been burned. However my first high performance plane was a learning experience. Maybe I've just been lucky.
 
asgcpa said:
My group has made an offer on a SR22. We are in the negotiation phase. Once we agree on a price subject to prebuy, it will go into prebuy.

What are the specific steps at prebuy? Once we get the squawks, it's my understanding they bifurcate between important and not important. The airplane just got out of annual so I am assuming (maybe wrongly) that it is airworthy.

How do you adjust price once you get the list from the prebuy shop? Also, please kindly keep on topic.
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Just bought an SR22. Two strong recommendations...

1. Join COPA if you haven't already. https://www.cirruspilots.org/

2. Let Savvy help manage your pre-buy; they manage >10% of Cirrus maintenance and can help you decide how to proceed: https://www.savvymx.com/

I negotiated $5K off the price of my SR22 due to a thorough pre-buy, and also saved $4,500 in maintenance the first year alone.
 
Theboys said:
I know it sounds crazy but I've never had a prebuy done by a professional on any of the 20 or so planes I have bought. I peruse the logs myself and check over the airplane myself. Usually the logs tell a pretty good story. I've really never been burned. However my first high performance plane was a learning experience. Maybe I've just been lucky.
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The difference is that you HAVE the experience and know what to look for. Most plane buyers that are new to the experience have no idea what to look for to make a informed decision...I know I did not when I got my first plane.
 
VWGhiaBob said:
2. Let Savvy help manage your pre-buy; they manage >10% of Cirrus maintenance and can help you decide how to proceed: https://www.savvymx.com/
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Do you mind describing how this went? Once you signed the agreement with Savvy, what happened next? Was the seller okay with this? What items came to light that you felt would have been done differently if you hadn't used them?

And now that you're with their MX program, what can you share about that?
 
AggieMike88 said:
Do you mind describing how this went? Once you signed the agreement with Savvy, what happened next? Was the seller okay with this? What items came to light that you felt would have been done differently if you hadn't used them?

And now that you're with their MX program, what can you share about that?
Click to expand...

Apparently also his contractor A&Ps are becoming kinda hit and miss on quality.
 
When I bought mine, the plane was correctly represented and there were no airworthy or significant issues found during the pre-buy. There were a few minor issues and the seller felt that his price was already fair enough, so instead of coming down off the price he agreed to fix a handful of the items the pre-buy mechanic had found. I thought that was fair and agreed and purchased the plane.

Shawn said:
The difference is that you HAVE the experience and know what to look for. Most plane buyers that are new to the experience have no idea what to look for to make a informed decision...I know I did not when I got my first plane.
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This is true. I did a lot of research prior to purchasing my plane (and I looked at several types) and with each one found some of the more common issues. That said, I still didn't have the experience to look through the logs myself so I relied on a third party mechanic. Even if I were to purchase another plane today I would likely still have a mechanic look over the logs and the plane to be sure everything was correct.
 
When I bought my 310 it was exactly as represented as well, and better than I could have hoped for. I looked it over for 10 minutes and made him a deal for his price. Rather than keep chasing a charging system problem, I made a deal that I would buy the alternator conversion and he would have it installed with the annual he'd have performed. Nothing came up that I didn't know I would have to deal with going in on a plane with engines that had sat in a hangar in Phoenix for 12 years during the airframe restoration.
 
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