One of the challenges of representing buyers, whether it is a Super Cub, King Air or Phenom is knowing where to start the opening shot: The offer.
How do you proffer a number to an aircraft seller that shows the seller multiple things? For example, your contact and methods demonstrate:
- Your math accounts for outliers such as super low or high airframe total time, damage history, missing logs or a run out engine. (And when these are great.)
- An offer that is serious (i.e. committed / real buyer) and likely to close.
- A number that is fair and close to what other transactions are valued at for the same make, model and age aircraft. (And how to find hidden gems here.)
- Adequate respect and mindfulness on how you handle the seller’s conditions or needs. (A smooth sale has as much to do with emotional self awareness, as it does the spreadsheet of how you structured the offer.)
Initial Pass – The Piston
With any new airplane purchase mandate I typically look at the client’s needs to make sure, based on budget, range, load, utility etc. that we’ve picked an optimal airframe.
Let’s say in this case, they’ve decided it has to be a Cessna 206, and it will be on wheels and occasionally wheel penetrating skis.
Right off the bat, there are tools like Aircraft Bluebook and Vref that will give you some semblance of what engine time and airframe time do to influence value.
The key, on the first pass of your candidates is to factor in other items and to focus on ones that have a perceived negative, since typically this is where the best values are found:
- High airframe time: This will be normal for the 205/6/7 family since they are both private and commercial aircraft. The Canadian and Alaskan commercial ones are nearing 10,000 and 20,000 hours total time in many cases. This makes GA and private pilots cringe since it seems so high. Fear not, these can be good values.
- Engine is Due: Not a terrible thing either since you’ll have to overhaul it someday anyway and frankly you have no idea how the engine was treated in its first 400 hours if it is that young. In other words, every hour you fly on the “expired” engine is essentially “free money” (if you aren’t going to operate commercially under FAR 135 or 703/4 in Canada) since you can’t possibly depreciate that engine anymore. In the case of the Continental IO-520 on the snout of a 206 that number is 1700 hours. I’ve seen plenty go to 2300 hours and beyond with minimal metal making, fuss or surprises. (However, be sure to install an engine monitor. I’ve had two engine failures and both times I would have seen it coming with a JPM or Insight GEM style cylinder head temp and EGT monitor.)
- Damage History: Great for you (the buyer) if the repair is legal and the paperwork is great to back it up. Damage on a CE 206 is not only inevitable in many cases (especially if it was on floats) but has zero actual effect other than optics and the emotions of the prospective buyer. But in reality, it has effectively disappeared if repaired per the FARs.
- Missing Logs: Section 12 of this Advisory Circular speaks to what is legal and works. In terms of managing the questions that will loom in the mind of the buyer, simply focus on this reality: Aircraft, unlike cars, are a moving body of continuously replaced parts. As the aircraft ages, so much new and overhauled stuff is put back on it that the blemish of missing logs can fade with time if the relevant logs have parts that have long since been replaced, inspected or approved.
Next post will focus on how to use an LOI or purchase agreement to show the seller how serious you are. The key, in making first contact, is to show the seller that not only are you ready to buy, but it isn’t your first rodeo. If it is your first rodeo, that’s ok, I’ll show you how to smell like you’ve been to many.