There are about 5,400 aircraft in the sky per day–all during peak flying hours. And this number is only increasing as more people are looking to buy their planes. In fact, many people are avoiding airports altogether, and would rather fly privately.
Luckily, this means the market for used aircraft is favorable. So if you have an aircraft you want to sell, keep reading this guide. We will teach you the best to sell an airplane!
Get Your Paperwork in Order
Before you sell an aircraft, there are some crucial steps you have to take. These steps will ensure a safe and portable sale. So the first step to selling an airplane is to make sure everything has been logged.
What this means is to ensure you have the logbook, certificates, and maintenance logs. You must also show proof of plane ownership.
These forms will help the buyer get an accurate description of the aircraft. Therefore, they will be able to assess the value and proceed with an offer or not.
If you have lost track of some records, some can be recovered on the FAA website. However, it’s best to have a physical copy of all your records. So try your best to get your paperwork in order before selling your aircraft.
Figure Out the Value of the Aircraft
Before selling an airplane, you’ll need to assess its value so you can properly price it. However, this part can be tricky because of the varying factors that determine the final price. For example, the avionics, wheels, engine, paint, interior, and damage history are only some of the factors.
You can value your aircraft yourself. However, the final price may be inaccurate. So it’s always best to have a professional value for your aircraft. This way, you don’t go under or over the final asking price.
Not to mention, valuing planes requires knowledge in the following fields:
- Market research
- Aircraft knowledge
- Sales
- Closing deals
- Taxes
And these factors all play an important part in selling a plane. So let go of any pre-convinced notions of aircraft value. And remember that the price is also indicative of how much the market is willing to pay.
So don’t get too attached to your aircraft. There is a chance it will sell for a lesser amount, even with an expert broker.
Factors That May Lower the Value
Some factors may increase the value of your aircraft. For example, any additional equipment or remodels. However, be aware that some additions may also decrease the value of the plane.
Typically, any installations that are unique to the previous owner lower the price. For example, printed names, initials, religious symbols, and bold colors.
So if you have any of the above, you may want to lower the asking price. Or remove these additions altogether.
Lastly, if the plane has had regular maintenance and repairs, this may increase the price. So ensure you keep your aircraft well maintained, even if you’re not flying it.
Figure Out if You Want a Broker or Sell It Yourself
If you’re trading an aircraft or selling one, you will have to decide to use a broker or not. And although both have their pros and cons, it’s always best to sell with a broker.
Brokers have a better understanding of the market. And they also have connections with people who are wanting to buy. But there are also cons to this option so keep reading!
Broker
Working with a broker will get your aircraft sold faster and at a higher value. This is because brokers will bargain on your behalf to get you the best deal possible.
However, before hiring a broker, ensure you have a written contract. This contract will protect you and everyone involved. More specifically, the contract will carefully detail any policies concerning the payment.
And this contract should also have a final commission price. Because if you didn’t know, the broker will get a percentage of the sale. So ensure these terms are all carefully outlined before making any final deals.
Selling Yourself
A sale by an owner can raise your profits because you don’t have to pay any broker fees. However, you must have a good understanding of the market, closing costs. And you must also have a system for finding qualified buyers.
All of which can be hard to do if you’ve never sold an aircraft before. So although you may save some broker fees, you may pay in other ways.
Tips for Advertising a Sell by Owner
If you do choose to sell the aircraft yourself, you’ll have to come up with an advertisement strategy. This step is crucial and will affect the selling timeline of your aircraft.
And this step may become overwhelming for some because of the vast amount of advertising options and platforms. However, a good place to start is social media because it’s free and easy to use.
A great way to get some exposure is to join Facebook groups. These groups have members who are specifically looking for an aircraft. Therefore, you will find suitable and interested buyers.
You can also use Instagram, Twitter, and Facebook market. But of course, you’ll have to vet out your buyers more. You can also go the professional route and take out an ad in the newspaper. Or rent a build board!
Making and Closing a Sale
If you did the right advertising and appraisal, then you should get some offers. But everyone is looking for affordable flying. Therefore you may get some low offers.
You can turn down these offers, or you can negotiate with the buyer. This is also a good time to inform them of any remodels. Doing so will allow them to see the overall value.
Once you have an offer that you like, proceed with caution. It’s important to keep records in order and pay attention to the steps. Many sellers get overly excited during this step and end up becoming a victim of a scam.
Figure Out How the Aircraft Will Be Delivered to the Buyer
This step does tend to frustrate some sellers, especially if the buyer is foreign. So after closing the deal, discuss the best possible way to deliver the aircraft.
The buyer has many options. For starters, they travel to the aircraft and fly it back. Or you may have to fly the aircraft to a specific location. Of course, you should add a fee if this is the case.
Watch Out for Fraudulent Buyers
Fraudulent buyers are everywhere and they will try and steal your assets and titles. And this can even happen with broker deals. So when looking into a broker ensure they follow safety precautions.
You can even ask them if they currently have any legal disputes or a history of faulty sales. If they are hesitant about disclosing this information, then it’s best to look elsewhere.
And if you are selling the aircraft yourself, then you’ll need to take even greater precautions. First, you must disclose any faulty or damaged parts. Not doing so could result in a lawsuit or criminal charges if someone dies while in the aircraft.
Ensure you have these disclosures in writing. Therefore, the buyer cannot claim to not have known of any damages. And of course, you must ensure the buyer has a pilot certification. You can check this on the FAA database.
Next, make sure the potential buyer has the credentials. So ask them for proof of income or bank statements. This way, you won’t waste time with window shoppers.
Hire an Escrow Company
If you’re not aware, an escrow company will hold your assets safely. This step is not necessary but does protect everyone involved. And once any contingencies are settled, then your assets are given to you.
So let’s say the buyer is willing to buy the plane if it has no interior damage. The buyer can then make a deal based on these contingencies.
However, you will not receive payment until the interior is approved. And this is why it’s important to disclose any damages. Not doing so could cause your payment to go into default.
Asking for Down Payment
Another way to protect yourself is by asking for a down payment. This amount can be 5 to 10 percent of the final price. But it’s important to establish this amount before closing any deals.
If any buyer is hesitant about giving you the down payment, then they could be scammers. However, some buyers may also be scarred by scams. Therefore, provide them with written contracts and receipts.
Collecting and Transfering Funds
Before receiving any type of payment, you should ensure it’s secure and traceable. So don’t sell an aircraft via cash. This method does not protect you because it is un-documentable.
It is best to have a wire transfer directly to your bank account. This method is completely traceable, which is important for IRS purposes.
If a bank transfer is not possible, then the next best option is a check. However, a check can be forged or bounced back. So make sure the buyer has the funds before making the final sale.
Lastly, when you do close on an offer, have a professional, write up a closing summary. This summary will protect you after the deal has been made.
Getting a Bill Of Sale
A bill of sale is another document that will protect you. So make sure the buyer signs the bill of sale before leaving. You can get this document at your local FISDO or download it on the FAA website.
When getting these documents ensure you have two originals of the Bill of sale form. One of the documents will go to the FAA. And you can keep the second one for your record.
Frequently Asked Questions
Normally you may still have some questions about selling an aircraft. So down below we’ve compiled a list of FAQs!
Do You Need a License to Buy a Plane?
No, you do not need a license to buy a plane. However, it is highly encouraged to sell to licensed pilots or those pursuing pilot training. Doing so will increase legitimacy when selling.
Do Airplanes Have a Title?
No airplanes do not have titles. However, they do have registration forms and the bill of sale. These documents help to validate ownership and other important information.
How Long Will the Registration Last?
The aircraft registration will expire in three years from the date it was registered or last renewed. So if the registration is about to expire, ensure you disclose that to the buyer.
How Does an Aircraft Transfer Work?
After selling a plane, the buyer must transfer the aircraft over to their name. This process does require a few steps.
For starters, they must terminate the aircraft registration certificate since it has your name on it. Next, they must fill out the sale certificate and mail it to the FAA registry. This step protects the buyer but it’s still an important step.
And you as the seller must remove any FCC license under your name. You must also remove the N number if your buyer is foreign. After both you and the seller complete these steps, the transfer should be complete.
What Is the Best Recourse if the Payment Defaults?
If you did your due diligence and the payment fell into default, then you should hire a legal team. You should be able to win a case against theft.
However, there are cases where the payment is rejected by your bank. So ensure everything is good on your end before filing a legal complaint.
Sell an Airplane Today and Earn Big
Now that you know how to sell an airplane, you can start making some deals. But remember to follow our safety tips so you get the best deal.
If you have more questions about flying and aircraft, then contact us today!
