Buying a plane .. have some questions

[Vavso]

I am considering buying a plane that is being sold for x # of $ Th e seller never used the term Firm in stating the price . Do i put a deposit down contingent on the pre buy inspection then negotiate the price or do I negotiate the price then put $ on the pre buy . Also what are the usual stipulations when putting $ down on a plane prior to pre buy . How can I assure return of the $ is something is not right. I know already the plane has a nose wheel shimmy ( its anew set of tires)after landing and the attitude indicator bounces around a little. Other than that it looks tight and has a killer IFR panel, fresh ifr cert and annual. The compression #' are good. and its got low smoh time.Is there a % of negotiating room in the asking price of a plane? Do I just come out and say listen whats your bottom $ price lets do business? Thanks Chas

PS its not a high demand plane as its gotta smaller useful load and lower cruise speed but for me its fine a nice stable ifr platform for shorter Ifr flying and time building.

 

[tarp]

I love airplane buying because it is capitalism at its best. There is a commodity (the plane) and your money. The two parties involved in buying and selling negotiate until the party selling gets hit with enough money to part with the commodity. The party buying doesn't give up his/her money until a commodity is worth the $.

First rule - keep your money as your money till the very last minute. Don't part with a cent until you have the entire package in front of you.

Let's do a used car instead. You go see a car that is of the type you want and has a reasonable "asking" price. You test drive the car and find that the fuel gauge is broken and there is an undefined squeaking noise. The owner says he'll get the fuel gauge fixed and the squeak is just the springs and the car hasn't been driven much. Now what are you going to do? Well you were interested in the car, but you've got three nagging doubts. 1.) Will he get the fuel gauge fixed and in what time frame? 2.) Is the squeak just the springs or something worse? and 3.) If the car hasn't been driven much, what other problems are there?
You can demand an inspection. You can negotiate a lower price. You can wait until the car is fixed to satisfaction. In the last one, you may lose the car to someone less picky.

So. let's go back to the plane. You said its not a popular plane and it seems like you may be the only interested party. Less of a requirement for you to put any kind of "holding" deposit.

The AI and the shimmy damper need to be looked at by your pre-buy professional mechanic. You have no way to assess what is going on with these (PS, new tires do NOT cause a shimmy unless they were installed by a basic moron!) The price is not negotiable right now because you may have to buy a $600 AI and you may have to have the shimmy fixed (which could cost $20 and could cost $600??).

As to the pre-buy - this is often a sticky situation. In the end, the easiest way to do this is to send YOUR mechanic to the field where the airplane is. The mechanic can go over the plane and give you a report. Sometimes this is not practical. Now you have to negotiate the transport of the airplane to the mechanic. Owners have a hard time parting with their birds - so either you have to talk the owner into an X-C with him driving and you paying or you have to give him a deposit and get a ferry pilot to fly the plane to the mechanic. Again - it's your money - try to spend as little of it as you can. And if you do spend the money, make sure you get something for it. For example, you pay a reputable mechanic to go down and inspect the plane. You are at least deriving a service for your dollars. Let's say you give the owner a deposit and he decides he doesn't want to go through with the sale - OK where's your piece of paper (contract) saying that you will be refunded.

Do not negotiate a price until you know all the details about the plane. Right now, you can say something to the owner like his price is reasonable, but...... (the items of the pre-buy inspection). You can say to him that his asking price is already too high and you need the price to be reduced by xxx dollars before you will start negotiating (probably will lose that plane).

Like the used car, though, you are not expecting perfection. This airplane will not be factory new. There will be blemishes and mechanical problems. Some you can accept, some you can't. My pet peaves are corrosion in the airframe and an under-used engine. I can't even stand to look at airplanes that have been sitting on the ground and rusting away. You can give me a 6,000 hr beat up paint job and interior with a worn engine dripping oil, but if the logs indicate that it has flown 20 hours every month since new, I'd be happy as could be. The plane can be repainted, a new interior installed and the engine overhauled. Corrosion, though, is like having cancer. You just don't know.

So, talk with the owner and negotiate how you are going to do the pre-buy. Don't even talk money right now until you have some real input into what the airplane has wrong with it. Be willing to walk away. If the owner won't negotiate or work with you - it may be a warning sign of something he's trying to hide. The commodity is just that. You are buying a hunk of metal. Today, tomorrow, whatever. Remain calm. (In the back of your mind like all airplane buyers, you've already got the silk scarf around your neck and pictures of your new "baby".) But the airplane is not a "baby", it's a piece of metal that is going to cost you many thousands of dollars in the future - so take your time and be willing to wait for the right one. It may be this one if the seller is willing and it may be the next one.

By the way, plane prices are a lot like used car prices. I want $5,000 for the car. I put it in the paper for $5599 or $5999. There's a chance that somebody out there will pay the higher asking price, but I can "settle" all the way down to $4999. Think about the AI an the "shimmy". You think the owner knew about these things. He already is thinking that he's got to fix them but it costs money. He can sell "as is" or fix and price.

This is not rocket science. But the more cold-blooded and casual you are about the deal, the better your pocketbook will look. Me, I hate Saturn dealerships with their non-negotiable car prices. Give me a good old fashioned car dealer and let the games begin. I give them that "I just love this car" junk and then when the money starts talking, I just walk away. They can't stand it.

 

[tarp]

Chas -

Let's try another tack just for your own benefit.

Now I'm basically a sceptic. And I can be a pessimist looking for worst-case scenarios.

OK, you saw this plane and maybe even flew it. New tires, nose wheel shimmy, low SMOH. Are these clues? Was this advertised as a NDH (No Damage History) plane? When the Overhaul was done - was it premature? i.e. Did the engine go to TBO?

I could paint a picture of a hard or wheelbarrow landing that turned ugly. Airplane comes down hard on the nose, gets a prop strike, bends the nose strut a little. Student pilot locks up the wheels, flat spots all the main tires too. Let's see what would it take to fix this plane - new tires, fix the strut, engine has to be torn down for a prop strike so let's do an overhaul, new or re-conditioned prop. I've known of mechanics that would never write the word "damage" in the logbooks. So you would see around the same date in the airframe books a "serviced nose landing gear and replaced tires" and in the engine book simply a notation of an "overhauled" engine.

Now that's a pessimistic view.

But that's also why you need a pre-buy.

The optimist in me would listen to the owner. "Oh well, the mains were getting a bit thin so I did all the tires to make it pretty. The dumb mechanic pinched the inner tube on the nose wheel and now its unbalanced and has a little shimmy".

Somewhere in between those two extremes is your airplane. I personally would not buy the first plane because someone went to great lengths to "hide" the fact. The second extreme is going to cost more money because you have a cream puff.

Let's say you were hunting for a $60,000 plane like a used C-172 of a fairly old vintage. Well I know the guy down the line from me was selling his 180-hp IFR 1978 C-172 for $90K asking. He probably got about $80-85 for it because it's a nice plane. But I also know that there is 1975 C-172 thats sitting on the tarmac and hasn't been flown in like 4 years. Its worth about $45K just for the parts and potential and I don't even think the owner would want to sell it. That's a $45K spread between a cream puff and a dog.

So talk to the seller, tell him you are interested enough that you would like to arrange a pre-buy inspection. Your mechanic will make the rest of the purchase decision pretty easy.

 

[azpilot]

I would offer a price up front and the deposit contingent upon a successful pre-buy. You can then argue about who will pay for repairs. A nose wheel shimmy can be very expensive to fix. It depends on the type of airplane. I the Musketeer, Sport, Sundowner line if you have to replace the shimmy damper I believe they are over $2000. On a Cessna they might cost under $500. Also, on the Beech line if you have to replace other parts of the nose gear like the landing gear donuts and bearings they are really expensive. So let's say the whole thing needs to be rebuilt. That might cost you 4k. I don't know what type of plane it is but these are things to consider. When I bought my plane I pretty much paid what the owner was asking minus a few small items which needed to be corrected about a thorough pre-buy. Every seller is different though so you might want to compare prices for the same aircraft on trade-a-plane, aircraf.com, aso.com and aopa.org classifieds. If you are an AOPA member there is lots of good information on the site for prospective owners.

Good luck

 

[Timebuilder]

You might get the seller to agree to a price in principal before the inspection begins, contingent on the idea that no repairs are recommended as a result of the pre buy inspection. Whatever comes up during that inspection as a recommended repair should receive a written estimate for parts and labor, along with cost estimates for recurring AD's as applicable. This is ammo for your final price negotiation. Those amounts are subtracted from the pre-inspection price.

Go into the pre buy with the midset that you are willing to pay the mechanic for his time and walk away a little smarter. Don't let yourself become convinced, even subconciously, that you need to complete the purchase because of the money spent on the inspection.

Caveat Emptor.