The cost of hiring a professional aircraft transaction specialist is typically outweighed by the savings they generate by helping you make strategic decisions and manage risk. Their negotiation skills, industry relationships, insights, and ability to identify optimal choices based on actionable data and experience can lead to monetary advantage, time-saving efficiencies, stress avoidance, and consensus between buyer and seller.
Every transaction is unique to the point where value can be perceived and assigned in several different ways, depending on the buyer’s or seller’s priorities. The proof of a thoroughly canvassed aircraft value can be evidenced by the purchase agreement. A professional sales representative cannot provide legal advice, but they can be a resource to a legal team to add context or professional opinion for negotiation points in the purchase agreement.
Imagine an agreed Letter Of Intent to purchase an aircraft at a certain price (X). However, further investigation reveals issues that impact the aircraft’s value, leading to a renegotiation of the price offered. These issues might be revealed during a pre-purchase evaluation or by reviewing the aircraft’s logs. Misrepresentation is not uncommon and isn’t always immediately apparent, and we’ve encountered many such cases.
How do you evaluate these factors, and how are they negotiated in the purchase agreement to arrive at a new price (Y)? What costs will the seller be responsible for, and which will the buyer agree to cover?
What are the ramifications of having to move the aircraft to a flyaway state, a tax-friendly state, or potentially a different country for closing? Does the buyer want to perform any follow-on work on the aircraft? If so, where and when can the desired work be accomplished? These items should be addressed in the Aircraft Purchase Agreement, and amendments may be needed if unexpected changes occur during the transaction. For instance, if work is deferred with a holdback in escrow, how will the holdback be released once the necessary repairs are completed?
An expert sales representative, along with a specialist aviation lawyer and tax advisor, will assist with identifying and navigating these points of negotiation in the best interest of their client. This can result in savings or cost benefits that well exceed the price of their fee.
The Duncan Aviation Aircraft Sales & Acquisitions Team compiled some of their expertise to prepare this Straight Talk book, which explores important considerations when navigating the pre-owned aircraft marketplace.
Read the Straight Talk about Aircraft Sales & Acquisitions here.
If you have any questions about preowned business jet or turboprop markets, want to discuss a potential transaction, or wish to learn more about our services, call us and ask for Aircraft Sales & Acquisitions at +1 402.475.2611. You can also visit us at DuncanAviation.aero/AircraftSales or email us at AircraftSales@DuncanAviation.com.
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