Pre-purchase inspection advice

camorton

camorton

Pre-takeoff checklist
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Craig Morton
Here's the situation: Seller has a plane that is out of annual. He would obviously prefer to sell 'as-is'. Hey says his local shop flat rates an inspection for this type (C210) at 40 hours of labor ($5K) plus oil, filters, etc. This wouldn't cover any repairs for discrepancies, of course. I don't mind paying out of pocket for a thorough pre-buy but I'd rather not pay for a full annual on an airplane I don't end up buying.

Any suggestions on how to negotiate this? I guess I could make an offer contingent on a passed annual? What happens if we find a show-stopper the seller doesn't want to fix or compensate for? Even in the best case, I don't get to fly the plane before I own it.

C.
 
Will the shop do a limited-scope prepurchase inspection on the major $$ items (engine borescope, airframe corrosion and rigging, gear swing, C210 common problems) for an hourly rate, with the idea that you'd like to roll it into a full annual if things are fine?
 
If it can’t fly, don’t buy*

*without a steep discount.
 
schmookeeg said:
Will the shop do a limited-scope prepurchase inspection on the major $$ items (engine borescope, airframe corrosion and rigging, gear swing, C210 common problems) for an hourly rate, with the idea that you'd like to roll it into a full annual if things are fine?
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That would be worth looking in to. Of course I'd need to get the seller to lower his price the cost of the annual since I'm paying for it now, not him.

C.
 
First piece of advice: look for something other then a Cessna 210.
You haven't told us which model number it is but, they all have their issues. Some of them just have more issues. If you can't afford a $300K high performance plane don't get a basket case that's been neglected for +20 years. Sorry, you asked. :blueplane::cool:

Check out this A.D.: 2023-02-17
 
1) It is normally considered to be a BAD IDEA to have the shop that has maintained the aircraft to do the pre-buy.

2) You may be able to negotiate with the appropriate shop to do the inspection portion of the annual. Then make a list of things that need to be addressed. You can then negotiate with the seller of what they will pay to fix. Then, if you buy the plane, the shop can complete the annual.
 
You agree to pay for a normal pre-buy inspection. It should not be any where near 40 hours/$5000. You agree on a price with the seller that is contingent upon a clean bill of health. In the event there are issues, aka not 100% clean, you are back to negotiations and you are out the pre-buy cost if you walk away. I had this exact issue happen last year on a plane I purchased. Prebuy of approximately $1000, which I agreed to pay. Anything that needed to be replaced would be the Seller’s responsibility until there’s a purchase agreement/closing on the sale. All of those things you would need to simply negotiate into the deal.
 
For a 210, an annual inspection is around 45 hours. For a fairly detailed pre-buy, it will be 15 hours for the best in the business on 210's (Tennessee Aircraft) to do it - assuming ALL seats/interior removed and inspection panels removed. That usually takes about 4 hours as well. Usually you will want to negotiate this out. Get one of the well known people who know 210's to do it (Paul New, john Efinger, John Wingfield, etc There are others). But since this is out of annual (it also is dependent upon how long its been out and why ?).

But if the deal is fairly decent, usually what is fair is you get someone to do the annual inspection (5-6K). They list out the airworthiness items, and the should/need to address items. The seller agrees to pay all the airworthiness items to get it to be airworthy. At this point - if seller refuses to get the airworthiness items done (or take the corresponding cut off the acquisition price), then you can walk away and seller is responsible for the annual price. If seller agrees to fix the airworthiness items - then you guys have to negotiate the "rest". And that is not mandatory to be covered by seller. Whatever you work out on that front- you work out. It will more than likely be in the sellers favor. But if you decide not to close, you lose out on the annual cost.
 
Get a prebuy, have the Seller do the annual and pitot/static inspections, get it airworthy. You never know what 10k / 20k / 50k surprise is waiting.
 
Remember a prebuy is a snapshot at the time you buy the plane. I bought a t206h 2 years ago which had a clean bill of health and nothing major on the prebuy. Annual last year was also a squeaker. This year I am going through the annual from hell. 3 weeks in and at least four major issues, an exhaust AD utilizing 2 1000 dollar v clamps, 2 bad jugs, a fuel tank leak from a dried out gasket, magneto required IRAN, and still counting. The AD clamps are on back order and who knows when they will be available, oh and they cost 10x what the faa said they were going to cost.

So the prebuy is not going to assure you that things are going to go to pot at next annual. My plane was very well maintained before I bought it and since I got it. You are looking at a plane that I would submit was not as well maintained on the basis of it being out of annual. To me not doing something as basic as an annual (unless there is a good reason) suggests neglect. I would expect problems in the future that could be quite expensive.
 
camorton said:
? I guess I could make an offer contingent on a passed annual?
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There have been some good comments. I'll limit mine to two interrelated general concepts.

1. A prebuy is not an annual. An annual is a determination whether an aircraft meets the definition of airworthiness today. A prebuy is a determination whether buying the airplane is a good deal. There may or may not be some overlap, but they are ultimately different.

2. Most good aircraft purchase contracts have prebuy provisions very similar to residential real estate contracts. The ability to walk away if an issue is found. "An issue" should not limited to airworthiness issues.

Consider two examples. If buying a ramp queen, you already know it's not airworthy. Your prebuy is an attempt to figure out what you are getting into if you buy it. OTOH, the prebuy for a airplane being used daily with no issues, might show that the airplane is 100% airworthy today but that an expensive component is going to reach its useful life in about 18 months. Maybe you want to buy that; maybe not; maybe you want a price adjustment.
 
Keep in mind a pre-buy has zero regulatory meaning. Its whatever the buyer, seller, and mechanic determine it to be. And given what is airworthy is half subjective and half objective to the person performing the prebuy, no two mechanics will give the same results even on the same aircraft.
 
also if you are financing it - most of those will require a plane that is within the annual and airworthy.. . .
 
Starting to see some consensus of opinion here. Make an offer contingent on passing annual with no major airworthiness issues. See if I can hire the shop to do a pre-buy which would serve as the initial part of the annual. Renegotiate an discrepancies prior to completing the sale. Only hitch I can see is that he could refuse to pay for any discrepancies and walk with a heavily discounted annual. On the other hand, I'm only out my pre-buy which I risk on any purchase anyway.

Thanks to everyone who responded. FYI, I've gone through the logbooks and the plane seems to have had very good maintenance right up until this dealer bought it. It's just been sitting for the past 9 months. That alone kind of makes me think there something wrong with it, or it is overpriced.

C.
 
camorton said:
Only hitch I can see is that he could refuse to pay for any discrepancies and walk with a heavily discounted annual.
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So have a contract that accounts for that. Perhaps a conditional reimbursement clause. @Bell206 pointed out that a prebuy is whatever the pilot and mechanic agree it is. So are the terms of a purchase contract - they are whatever buyer and seller agree to.
 
Depends upon timing. Mechanic doing the annual will bill the owner generally. As technically he cant "annual" the plane you are looking at and make any log entries in the logbook. So technically you dont pay anything until you determine the outcome of the result. The mechanic is in possession of the aircraft so he doesnt have too much issue with it. As he'll get paid before the releases the plane. So you arent on the hook if the seller bails, as the seller cant get his plane back without the payment being done.

Its a bit complex - and sometimes they will require the annual to be prepaid. Then it gets a bit tricker. But its just safer all around to have the plane airworthy and then deal with the non airworthiness items.
 
Anthem said:
As technically he cant "annual" the plane you are looking at and make any log entries in the logbook.
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Curious. Why couldn't he annual and sign it off?

That's assuming the current owner knows someone will be taking his aircraft apart.
 
Anthem said:
Depends upon timing. Mechanic doing the annual will bill the owner generally. As technically he cant "annual" the plane you are looking at and make any log entries in the logbook. So technically you dont pay anything until you determine the outcome of the result. The mechanic is in possession of the aircraft so he doesnt have too much issue with it. As he'll get paid before the releases the plane. So you arent on the hook if the seller bails, as the seller cant get his plane back without the payment being done.

Its a bit complex - and sometimes they will require the annual to be prepaid. Then it gets a bit tricker. But its just safer all around to have the plane airworthy and then deal with the non airworthiness items.
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Bell206 said:
Curious. Why couldn't he annual and sign it off?

That's assuming the current owner knows someone will be taking his aircraft apart.
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I have the same kind of questions.

What's the technicality that says he can't (assuming the owner agrees)?

And why should the seller be on the hook for something the buyer agreed to pay for? Sure, under most state laws, the mechanic has a lien for payment, but ultimately, payment is the responsibility of the person who ordered the job.
 
Bell206 said:
Curious. Why couldn't he annual and sign it off?

That's assuming the current owner knows someone will be taking his aircraft apart.
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You dont own the logbooks. Technically you cant have the A&P perform service on something that isnt yours either. The owner has to do it. You cant force a logbook entry in to someone elses logbook. Though the A&P can deem it unairworthy and that bag of worms. But its also why
 
Because the mechanic will hold the lien against the plane for non payment. And the plane is still owned by the seller. So in cases where people go “will sell with a annual” - (which one shouldn’t take to be worth much as it’s their mechanic) - it’s them ordering the annual and the annual is done under the sellers orders and the seller is covering the cost of. The mechanic will give the seller (or you) the stickers for said annual after payment. But generally the mechanic AP doing a prebuy will not make logbook entries (nor should the seller trust anyone to make them) in their logbook
 
Anthem said:
Because the mechanic will hold the lien against the plane for non payment. And the plane is still owned by the seller. So in cases where people go “will sell with a annual” - (which one shouldn’t take to be worth much as it’s their mechanic) - it’s them ordering the annual and the annual is done under the sellers orders and the seller is covering the cost of. The mechanic will give the seller (or you) the stickers for said annual after payment. But generally the mechanic AP doing a prebuy will not make logbook entries (nor should the seller trust anyone to make them) in their logbook
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It all depends on what the purchase contract says.
 
I’d suggest getting it annualed on your dime and squawks get repaired on the sellers dime. If any repairs are serious enough for him to cancel the deal? He pays for the inspection
 
Anthem said:
You dont own the logbooks. Technically you cant have the A&P perform service on something that isnt yours either. The owner has to do it.
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Still don't quite follow based on the context above. Perhaps an example using Post 16 below:

Make an offer contingent on passing annual with no major airworthiness issues. See if I can hire the shop to do a pre-buy which would serve as the initial part of the annual. Renegotiate an discrepancies prior to completing the sale. Only hitch I can see is that he could refuse to pay for any discrepancies and walk with a heavily discounted annual.
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If the buyer asks the seller, as part of a contingent offer, to have a prebuy/annual performed by the shop, and the seller agrees, your position is the mechanic could not "technically" perform the prebuy/annual or make his entries because the buyer does not own the aircraft?
 
Stewartb said:
I’d suggest getting it annualed on your dime and squawks get repaired on the sellers dime. If any repairs are serious enough for him to cancel the deal? He pays for the inspection
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Problem is he and I might not agree on what is 'serious'. I'm trying to avoid being on the hook for the full cost of an annual for a plane I don't yet own.

I'm thinking of getting the seller to contract with the shop for the annual (on his dime) and I send the shop the cost of the pre-buy to be applied to the inspection. Worst case for him is he gets a discounted annual. Worst case for me is I'm out my pre-buy money. But that could happen on any sale. I've walked from planes after a negative pre-buy before.

C.
 
I don’t think you read what I said. All repair costs would be on him. If something is so large that he isn’t willing to pay it, he pays for the inspection cost and you walk with no loss. Pretty simple.
 
Have you seen the logbooks yet? If not, I suggest you review the logs before you spend a dime. Also download the list of applicable ADs and compare them to the logs. You may find you have something expensive coming up in the next few months or year. You should also order the data disk from the FAA. https://www.faa.gov/licenses_certif...ion/aircraft_registry/copies_aircraft_records You might also want to run a query at http://www.aviationdb.com/Aviation/AircraftQuery.shtm .

I walked away from a couple of planes after reviewing the records; it wasn't worth going through a prebuy.
 
Stewartb said:
I don’t think you read what I said. All repair costs would be on him. If something is so large that he isn’t willing to pay it, he pays for the inspection cost and you walk with no loss. Pretty simple.
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I read what you said:
Stewartb said:
I’d suggest getting it annualed on your dime and squawks get repaired on the sellers dime. If any repairs are serious enough for him to cancel the deal? He pays for the inspection
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Getting the annual 'on my dime' means I'm agreeing to pay, no? Then if something comes up and the deal falls through, he's supposed to step up and write the check? Yes, the shop has his plane, but my name is on the work order agreeing to pay. I could see this being a problem.

Maybe I don't understand what you're suggesting.
 
Seller agrees to fix repairs.

If seller decides not to fix repairs as agreed, he then instead agrees to pay for the annual you ordered up.

Either way you stick him with the repairs, the bill for the annual, or the lien on the airplane. 3 exits.

Can't imagine a seller agreeing, but I like the ask. Worth the try. If this seller has made representations contrary to any of those outcomes, then this is the time to make him put up. :)
 
camorton said:
I read what you said:

Getting the annual 'on my dime' means I'm agreeing to pay, no? Then if something comes up and the deal falls through, he's supposed to step up and write the check? Yes, the shop has his plane, but my name is on the work order agreeing to pay. I could see this being a problem.

Maybe I don't understand what you're suggesting.
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put your money in an escrow account?
 
Brad W said:
put your money in an escrow account?
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The best way to handle this is that you put earnest money down on the deposit in escrow. Seller orders the annual inspection. Put it in the agreement - if seller doesnt make it airworthy - then seller covers the cost of the inspection (seller would be foolish to not finish and just get the airworthiness items taken care of). If buyer doesnt go through with it - then buyer is responsible for some amount and would lose it out of escrow.
 
camorton said:
I read what you said:

Getting the annual 'on my dime' means I'm agreeing to pay, no? Then if something comes up and the deal falls through, he's supposed to step up and write the check? Yes, the shop has his plane, but my name is on the work order agreeing to pay. I could see this being a problem.

Maybe I don't understand what you're suggesting.
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Skip calling it an annual and it might make more sense?

Buyer gets a prebuy. Based on the results, the buyer (1) accepts the aircraft, (2) rejects the aircraft, or (3) gives the seller a list of airworthiness discrepancies to be fixed by the seller. If the Seller fixes them, the deal goes through. If the seller decides not to, the deal is over and the seller reimburses the buyer for or pays (all or a pre-determined portion) of the prebuy.

Call the prebuy an annual or include an annual as part of the prebuy. Still the same end result.
 
schmookeeg said:
Seller agrees to fix repairs.

If seller decides not to fix repairs as agreed, he then instead agrees to pay for the annual you ordered up.

Either way you stick him with the repairs, the bill for the annual, or the lien on the airplane. 3 exits.

Can't imagine a seller agreeing, but I like the ask. Worth the try. If this seller has made representations contrary to any of those outcomes, then this is the time to make him put up. :)
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I've seen exactly this type in several purchase contracts Not necessarily full payment but at least some of it. Actually, in all of them I've seen in use, the language was already in the contract when the buyer received it.
 
You can research the AD notes and other type nuances and do a preliminary inspection your self. I doubt the seller will agree to pay you for anything if you decide to walk as I don't imagine he cares if it flies or not. If he said it usually cost 5-6k for an annual then agree to pay the asking price plus annual and put the money in an escrow until it's airworthy. Or just tell him to let you know when the annual is done and you will come back and buy it.
 
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