Who pays for pre-buy inspection?

Discussion in 'Flight Following' started by tawood, Jul 21, 2021.

  1. tawood

    tawood Pattern Altitude

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    I made an offer on a plane the other day, and since I'm attempting to buy a plane for much more than any plane I've owned in the past (by a factor of over x3), I'm trying to do everything "by the book". The planes I've purchased in the past: no pre-buy, no contract, etc., and I bought them more or less like I would buy a used car, for used car prices, or at the most cheap-new car prices. In my ownership past I've bought 5 different one, two, or four-seaters but in that group the most expensive one's purchase price was (fortunately) not enough for me to worry about losing money if things went south.

    Any who, I've decided to now use a contract, and I found one online that I thought would do the trick, found here:

    https://www.airloans.com/pdfs/NAFCO-Purchase-Agreement.pdf

    Overall, it seems like pretty standard stuff, with one exception. This line here (the part I made bold) concerning disputing anything wrong found in the pre-purchase inspection:

    If Seller declines to pay the cost of repairs, Seller shall refund, or have refunded, the Buyer's deposit and shall reimburse the Buyer for the cost of the pre-purchase inspection.

    Is this normal? If I was a seller, NO FRIGGIN' WAY would I agree to that (and he/we didn't). But, as a buyer, it sounds great. Of course the cost of a pre-buy is small potatoes in the overall purchase, but still...
     
    Last edited: Jul 21, 2021
  2. Stewartb

    Stewartb Final Approach

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    Inspection is on the buyer. Repairing airworthiness problems is usually on the seller, but that needs to be agreed upon ahead of the inspection. I'd skip whatever you think a pre-buy inspection is and go for a full annual, and not by the seller's mechanic.
     
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  3. Radar Contact

    Radar Contact Pattern Altitude

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    If I was the seller I’d say pound sand on that clause. Like you said, that’s all for the buyer.

    In my opinion, most sellers would probably pay to fix legitimate airworthiness conditions. Problem is the difference of opinions between mechanics can vary widely at times.
     
  4. DFH65

    DFH65 Pattern Altitude

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    If I was a seller no way I would agree to that.
     
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  5. Morgan3820

    Morgan3820 En-Route

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    Typically, I wouldn’t either. Good bad or in different the pre-buy on anything is always a responsibility of the buyer, at least in my world. I have paid for a pre-buy and walked away when it failed the pre-by knowing that I was going to eat the cost of the pre-buy. Cost of doing business in my opinion.
     
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  6. Kristin

    Kristin Cleared for Takeoff

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    You need a contract that lets you back out based on the results of the pre-purchase inspection, at your (buyer's) sole discretion. "Airworthy" items is just too fuzzy a term and can end up in a legal dispute.

    A pre-purchase inspection is different than an annual. An annual means the aircraft meets minimum airworthiness standards (In the IA's opinion) at that moment. A pre-purchase inspection is forward looking and should give you a good idea of what major items of maintenance may come due soon. Annual's are a waste of money unless the plane needs an annual, then you can do a pre-purchase inspection and segue it into an annual inspection.

    If you are buying a complex aircraft, especially if it is a vintage complex aircraft, get someone who is super knowledgeable in that type to do the pre-purchase assessment.
     
  7. luvflyin

    luvflyin Touchdown! Greaser! PoA Supporter

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    This contract does give the Buyer sole discretion to back out. It's the Seller having to reimburse Buyer for his cost of the Pre-buy that is the issue.
     
  8. tawood

    tawood Pattern Altitude

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    Ok, we seem to be in agreement here. I made an offer on a different plane last fall to a broker, and I paid for the pre-buy (which it failed miserably) without it ever crossing my mind that somehow the seller should pay for that. On this current plane, the seller and I just crossed out that last bit and initialed the change. I have a pre-purchase scheduled Monday with my mechanic (that will be the start of the annual if no major problems are found).
     
  9. eman1200

    eman1200 Touchdown! Greaser!

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    everything is negotiable. but I'd say the buyer pays for any inspection. I think we used an aopa purchase agreement and kept modifying it and modifying it until we both agreed on the terms. but I had a fair seller, good guy*

    *I haven't spoke to the former owner in a long time. a few weeks ago I was in asheville and he was flying a jet and saw my plane (formerly his) on the ramp and left me a note. that was kinda cool.
     
  10. Stewartb

    Stewartb Final Approach

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    I must have better mechanics than you because mine have never settled for minimum standards.

    Where do you find the approved checklist for a pre-buy inspection? Have you ever seen a mechanic sign his name to a pre-buy in the logbooks? I know several really good mechanics and they won't do pre-buys. They will do annuals.
     
  11. Kristin

    Kristin Cleared for Takeoff

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    I am confused. You are not the OP, so what is your involvement here?

    As a seller, I wouldn't reimburse for the pre-purchase inspection.
     
  12. tawood

    tawood Pattern Altitude

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    He's not involved, he just read the contract (maybe you didn't see the link?).
     
  13. NealRomeoGolf

    NealRomeoGolf En-Route

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    He agrees with you.
     
  14. Kristin

    Kristin Cleared for Takeoff

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    I am the IA in question on any pre-purchase inspection or anything else done on my plane. That aside, the FAA standard is what it is, but subject to a great deal of interpretation differences between IA's. But unless your "better" mechanics actually remanufacture your aircraft to new specs, on an annual there will be things that must be repaired, things that are new, and a whole lot in between. However, the annual looks primarily at the condition of the aircraft at that moment and is not predictive in nature and almost never addresses the condition of the avionics. A buy might want to know if certain components are likely at the end of their life cycle, as there could be substantial maintenance bills coming down the line. The pre-purchase is forward looking.

    It appears that your mechanics don't have a clue about how to do a pre-purchase inspection, which is typical.
     
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  15. Stewartb

    Stewartb Final Approach

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    Please post a reference to the standards for a pre-purchase inspection.
     
  16. Sluggo63

    Sluggo63 Cleared for Takeoff

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    There's a really good reason to do a pre-buy versus an annual. Mike Busch lays out a pretty well thought out argument for that exact thing. Different scope, different inspection, different outcomes. Mainly, once an annual is started, it has to be finished and signed off. A pre-buy isn't that.
     
  17. schmookeeg

    schmookeeg Administrator Management Council Member

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    I feel like you're deliberately picking a fight with this, but just in case I'm wrong:

    There is no "approving" a checklist, other than the buyer's selection of the prebuy mechanic. I do prebuys on a specific type and have generated my own checklist. This checklist is an amalgam of things from the factory's annual checklist which I cherry-picked and believe are germane to ownership cost or discovering plane condition, the type club gear swing checklist, and expensive SBs and ADs that may have been not well complied with (particularly SBs that can lead to expensive repairs if neglected).

    This checklist is from my experience from owning a shop that specialized in those types, and is informed by common wear/repair and expensive surprises we found at annual. Nobody checks my work. Caveat Emptor.

    I only will sign logbooks when I do a prebuy if I perform a "while I'm there" maintenance action. Cutting an oil filter for particle inspection will necessitate its replacement, and that gets a log entry.

    My report assists the buyer with his/her purchase decision, condition of the plane, and my opinion on things needing addressed in the immediate, near, and far terms, plus commentary on cosmetics, avionics install, and function -- since I always fly the plane for a prebuy and try every knob/switch/doodad that I can, verify rig seems correct for the specific year/model/engine, and shoot an approach or two to vet avionics and autopilot.

    ==

    I did not see Kristin assert that pre-buys were an FAA inspection subject to any standard or reference at all. If you know of her reputation, you know she'd be on the very very short list for pre-purchase inspection for her specialized type of plane, and she would absolutely do a better PREBUY than any good annual shop, because she's looking for things that will bite a new owner on a 5-10 year horizon and spending time on discovering the plane's provenance, quality, and condition.

    Good annuals can do that too, but the priority is airworthiness "right now" and preservation of IA privileges. :)

    $0.02
     
    Last edited: Jul 21, 2021
  18. BryanAV8R

    BryanAV8R Pre-takeoff checklist

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    in the 5 airplanes (obviously, not my main business, but just fate that I would be selling planes from time to time) I've bought and sold in my career of ownership...buyer pays for pre-buy at AP/IA of his choice, reimburses for fuel/ferry pilot if off-field, seller pays for any incidental needed repairs (mis-routed oil lines or leaky rocker box gaskets, for instance...not a field OH of the engine, obviously). If the buyer goes ahead, I always suggest turning into an annual (at their expense...) upon closing of the title; all this is predicated on an earnest money deposit being placed in escrow (in other words, there has to be some skin in the game..I'm not flying a plane to an unknown wrench at another field on a whim) which is refundable if the buyer backs out.

    Everything is negotiable; if both parties' interests are protected, then it's all on the up and up. But it's all in writing to protect both interests.

    (Of course, buying from a dealer is another matter. I prefer to deal with the same dealer over the course of a few ownership experiences; one: we've known each other for decades, two: he knows how I like to take care/upgrade rides, and three: any glitches in the first 6 months, I get parts at his cost, and he gives me the AP/IA to do/inspect the work. It's worked out to both of our benefits over the years. Thing to remember, in my estimation: it's a business on his part, and an avocation on mine. Work with someone who doesn't consider it a zero-sum game...and be prepared to haggle a bit. That's part of the fun...again, everything is negotiable.)
     
  19. Stewartb

    Stewartb Final Approach

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    Not picking a fight. I disagree. There is no universal standard for a pre-purchase inspection, no governing agency to enforce anything, and no legal recourse for the customer. Ask 10different mechanics, get 10 different results. If it makes you feel good? Go for it.
     
  20. midlifeflyer

    midlifeflyer Touchdown! Greaser!

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    I agree with @Stewartb. There is no such thing as a "standard" deal if you are pulling contracts off the internet. I have seen multiple variations on the theme of pre-buy inspections, cancellation, and who pays what. The deal you make is the deal you make and it's "fair" if you agreed to it. Unfortunately, my overall experience has been that in so many cases, neither party to a downloaded form contract has any idea what it means. Sometimes not even the broker in a brokered deal.

    My "favorite" was the buyer and seller who downloaded the AOPA agreement and deleted a few "unnecessary" paragraphs. Guess what the litigation was about.
     
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  21. Kristin

    Kristin Cleared for Takeoff

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    Please post the message number where I stated that there was such.
     
  22. Kristin

    Kristin Cleared for Takeoff

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    What are you disagreeing with? No one said there was a standard for a pre-purchase inspection. The issue of a standard is beside the point. The fact that there is a minimum standard for an annual inspection doesn't mean that an annual inspection to minimum standards is a valid way to approach a pre-purchase inspection, as least not for more complex aircraft. There are a lot of things that go into a competent pre-purchase inspection that are not on any annual checklist.
     
  23. Radar Contact

    Radar Contact Pattern Altitude

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    In the real world (my experience) 10 different IA’s will result in 10 different annuals as well.

    Fully understand the point of simply telling a random mechanic, “do a pre-purchase for me” has no definition but acting like an annual is automatically better than a pre-purchase isn’t accurate…in my experience.

    I’d take a well defined pre-purchase from a top specialty shop over an annual from someone who claims to be any day.
     
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  24. k9medic

    k9medic Line Up and Wait

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    I'm under contract for a plane right now. It's out of annual so we wrote the contract as follows with me paying $1200 towards the annual (since I would have to pay for the pre-buy anyway.)


    4. Pre-Purchase Inspection (Waived). Except as provided otherwise in this agreement, this Aircraft is sold "as is."
    There are no warranties, either express or implied with respect to merchantability or fitness applicable to the
    Aircraft or any equipment applicable thereto including warranties as to the accuracy of the Aircraft's logbooks,
    made by Seller. Buyer agrees that no warranty has been expressed or implied by Seller and that Buyer has
    inspected the Aircraft and understands that it is being purchased "as is." Buyer hereby expressly waives any claim
    for incidental or consequential damages, including damages resulting in personal injury against Seller.

    Seller warrants to the best of Seller's knowledge that: (a) the aircraft is in airworthy condition, (b) has a
    current annual inspection; (c) the Aircraft has a currently effective Standard Category airworthiness certificate
    issued by the Federal Aviation Administration; (d) all of the Aircraft's logbooks are accurate and current; (e) all
    applicable Airworthiness Directives have been complied with.
     
  25. eman1200

    eman1200 Touchdown! Greaser!

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    maybe I missed something but you said the plane is OUT of annual but in the contract it states that the aircraft has a current annual?
     
  26. Kristin

    Kristin Cleared for Takeoff

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    Prepare for a couple of years of abnormally high maintenance bills.
     
  27. k9medic

    k9medic Line Up and Wait

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    Correct. That means the seller has to present the aircraft in annual - aka pay for it, before we can close. I will contribute some funds towards it since I would normally pay for a prebuy anyway.


    Sent from my iPhone using Tapatalk
     
  28. k9medic

    k9medic Line Up and Wait

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    We own airplanes… isn’t every year abnormally high?


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  29. eman1200

    eman1200 Touchdown! Greaser!

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    ok. and what if half way thru the annual the seller says meh, I don't feel like selling anymore?
     
  30. k9medic

    k9medic Line Up and Wait

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    Unfortunately any contract can go like that.


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  31. Ventucky Red

    Ventucky Red Cleared for Takeoff

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    A pre-buy inspection (home or airplane) to me is letting me as the buyer know what is coming down the road and what may need to be fixed or what is not kosher.

    Sold a house once where the buyer after the inspection gave me a list of stuff 20 things they wanted fixed, much of it some pretty stupid stuff. I told them that the inspection was for them and not a laundry list for me.. Told them the price was staying where it was and they have 3 days to move forward on the purchase or move on. They chose the latter and the next buyer in line moved through with the deal.

    In today's market (airplanes and real-estate), its a seller's market don't expect much in the way of concessions.
     
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  32. David Megginson

    David Megginson Pattern Altitude

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  33. MooneyDriver78

    MooneyDriver78 En-Route

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    I disagree with their prebuy philosophy (if you let them manage the prebuy). Prebuy should be for big ticket items that you can’t inspect : corrosion, engine, etc. Not for avionics testing (you should have checked that during your test flight before you make an offer). Or lights that don’t work. Or worn out tires. In other words if you preflight the plane you should already have a good idea the basic condition.
    If you make offers on planes out of annual or without doing a test flight….good luck.
     
  34. k9medic

    k9medic Line Up and Wait

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    When the seller and I discussed the annual/prebuy, we agreed that if it's airworthy, and no major things pop up we will complete the sale. I'm not going to nickel and dime somebody on an annual since each A&P IA has their own opinion of what needs to be fixed.

    Thankfully this is not my first airplane and I learned that early on.
     
  35. midlifeflyer

    midlifeflyer Touchdown! Greaser!

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    Well, you never know. If a buyer is willing to take the risk of not having someone if his own choosing answer the question, "is this a good deal?" that's up to them. It might work out as planned.

    OTOH, it might not. I was involved in one of those "fresh annual" cases. Turns out the airplane had an undocumented gear up with undocumented repairs the seller's mechanic missed(?) in multiple annuals. It was found the very first time the buyer took it to his own mechanic for service. Airplane grounded. FAA called in. Lawsuit filed a few thousand miles from home.
     
  36. David Megginson

    David Megginson Pattern Altitude

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    T
    That sounds almost the same as Busch's philosophy, actually — focus on the big stuff, and don't waste time on small airworthiness items that are cheap to remedy. Also (unlike an annual), start with the biggest stuff, and stop as soon as you hit a showstopper.
     
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  37. David Megginson

    David Megginson Pattern Altitude

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    A plane can be airworthy but on the edge of $30K in repair costs (major corrosion, etc), or unairworthy because of a missing 25¢ screw. I wouldn't use airworthiness as my main criterion for purchase — it's the answer to the wrong question.
     
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  38. MooneyDriver78

    MooneyDriver78 En-Route

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    I saw a post somewhere of their PB results, they had a lot of trivial squawks like lights, torn seat, etc., of course I don’t know what the buyer requested.
     
  39. Kristin

    Kristin Cleared for Takeoff

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    He might, or might not get lucky. I just suggested to be prepared. :) It it Russian Roulette of the wallet. Probably with more than on bullet loaded.
     
  40. k9medic

    k9medic Line Up and Wait

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    Unfortunately putting "the buyer and seller will apply common sense to this transaction" in the contract doesn't really hold up in court. :D

    For that matter, you can use just about any reason to break a sales contract.
     
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