Purchase question.

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Firepac

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Firepac
I'm currently in the process of purchasing a SR22 with the purchase agreement already drafted. Is it generally recommended to hire an aviation lawyer to oversee the closing?

The only issue I'm concerned about is the repositioning fee of the aircraft. The seller and I have verbally agreed that I am responsible for "Fuel for Flight," "Ground Transportation," and "Airline Ticket." I just don't want to end up being responsible for unforeseen expenses such as hotels if their flight back home gets delayed or cancelled.

The purchase agreement defines repositioning expenses as "any direct costs associated with the repositioning of the AIRCRAFT for the purpose of this transaction, to include fuel, pilot services and travel expenses." Is it to my interest that this gets changed to something else?

Also the seller wants to use AIC Title Services for the escrow. How's their reputation?
 
Firepac said:
any direct costs associated with the repositioning of the AIRCRAFT
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Get it all in writing. What if the aircraft breaks enroute--who pays? FWIW: based on this question and your previous questions I would obtain the assistance of an experienced person who will look out for your personal interests.
 
Unless you have specific figures for each service or expense ,you leave yourself open to increased costs.
 
Firepac said:
"any direct costs associated with the repositioning of the AIRCRAFT for the purpose of this transaction, to include fuel, pilot services and travel expenses.
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As I read it, you're on the hook for everything, including the pilot's time charges, for the whole delivery. Including "travel expenses" to return said pilot to his point of origination.

I hope you're not too late to add a cap of $x, or at least a provision for maximum number of hotel nights and meals.

The way it's written you're likely to get a $5,000 invoice for steaks, drinks, hookers, and blow. Those are "usual and customary" travel expenses for SR-22 pilots.
 
Ravioli said:
As I read it, you're on the hook for everything, including the pilot's time charges, for the whole delivery. Including "travel expenses" to return said pilot to his point of origination.
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My interpretation is the same as yours. I’d be flying my own airplane, not paying someone else to ferry it for me.
 
The best place to have a lawyer is at the point of contract. For the closing, you want an escrow agent. The company which does your title exam is the standard for that. If you are financing the deal, the bank will insist on it.
 
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Lots of difference between first class and economy. You left yourself open for whatever he wants to buy. The Government has per diem rates for meals and hotels and even has contract amounts for air travel between cities. You may be able to find them and put them into your contract.
 
From least expensive to most expensive:

Cost for you to commercial travel to point A, then ferry it home should be about $X minus the pilot's flight time (and you get to log time).

Costs for pilot to ferry the plane from point A to you, then commercial travel back to A is $X.

Cost to hire a CFI at point A to fly with you home, then their commercial travel back to A is also about $X, but you have to add travel to point A for yourself, but you also get to log time.

If you do hire/pay somebody to help with this, do the market research on how much it should cost to travel in economy and staying at a decent hotel and cap it there, in writing. OR figure out what that value is, and just pay it. That way if they want to find a cheaper flight and cheaper hotel and deal with the lack of comfort and no snacks and dirty hotel room they can pocket the difference and feel good about pulling one over on you but you still don't get surprised with an unexpected travel expense.

Finally, you can include the requirement that only travel expenses with receipts up to a certain amount will be reimbursed. And ensure "pilot services" is clearly defined. I deal with contracts frequently and if I've learned one thing it's to always define everything very clearly.
 
Bell206 said:
...I would obtain the assistance of an experienced person who will look out for your personal interests.
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i second that notion. hire thee an atty concentrating in the buying and selling general aviation aircraft.
 
Thanks! Just hired an aviation attorney to oversee the closing.
 
PlasticCigar said:
Is the aviation attorney cheaper than the airline ticket?! I was technically “on the hook” for travel expenses but my ferry pilot made a cheap fuel stop, stayed at Motel 6 and flew back home on a jumpseat. I guess I got lucky.
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He was still behaving like the owner of the aircraft, instead of someone who just recently unburdened themselves from that dubious status. :D
 
Ryanb said:
My interpretation is the same as yours. I’d be flying my own airplane, not paying someone else to ferry it for me.
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It is probably to reposition the plane to where he wants the prebuy inspection to take place. So he doesn’t own it yet.
 
Also should the lawyer be present upon delivery of the plane?
 
Rgbeard said:
Wow.

I bought my airplane with a handshake, wrote a personal check, and flew it home.

I guess I got off easy.
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You wrote a personal check? Looks like the seller got off easy too.
 
hire a ferry pilot, go there and fly it back if you are not able/comfortable doing it yourself
 
Firepac said:
The only issue I'm concerned about is the repositioning fee of the aircraft. The seller and I have verbally agreed that I am responsible for "Fuel for Flight," "Ground Transportation," and "Airline Ticket." I just don't want to end up being responsible for unforeseen expenses such as hotels if their flight back home gets delayed or cancelled.
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What did the seller do in the pourparlers in this transaction already which make you fear such shenanigans?

If I did not trust a plane seller, top of my concern list would not be that he might stay in the Holiday Inn on my dime. I doubt that I would have him ferry it for me at all in that scenario.
 
schmookeeg said:
What did the seller do in the pourparlers in this transaction already which make you fear such shenanigans?

If I did not trust a plane seller, top of my concern list would not be that he might stay in the Holiday Inn on my dime. I doubt that I would have him ferry it for me at all in that scenario.
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I agree. Holiday Inn vs. Ritz Carlton would be low on my list of concerns.

Will your attorney put him at the La Quinta Inn?
 
I've ferried many airplanes. Most were sketchier than implied. I've flown planes with fresh annuals " " that developed electrical problems, fuel leaks and failing gyros. Gear problems? Yep.
I once spent three days in Texas dodging thunderstorms and can't tell you what the state looks like.
Who is the OP expecting to eat delays like that? The ferry pilot?
The purchaser of the plane is on the hook for the cost of ferrying unless the purchaser holds out for "FOB my hangar" (many reasons for doing so actually). It should figure into your cost of acquisition, and can be considerable.

I stink when I show up with your plane. If I got a room it's because of a grounding (mx,wx) and it would be the cheapest I could find. I will have eaten crappy fast food for the duration, mostly on the run. I will possibly have had a near death experience in your "new" POS. Your plane will not have a scratch on it that it didn't have when I started.

Yes, I actually love doing it. I recently had a guy ask me to fly a plane diagonally across the country. A thirsty plane. He threw out a number that sounded like a lot. I did the math and it wouldn't have covered the fuel let alone a ticket home. I countered with a cost that would barely cover fuel and oil and put it on him to get me a plane ticket back. He's coming up another scheme which that cannot possibly be cheaper. Good on him.

Now I don't do it for a living, I do it because it's a life altering experience to fly a beer can across this country of ours. I figure I'm going to eat and sleep anyway but there has to be enough money to get me off the couch or a really interesting plane.

If you don't go get your own plane then you're missing out. I can't fathom paying someone to do it (I've been known to burn vacation from my day job for the right opportunity). Guess I'm weird. I suspect most ferry pilots are either young guys trying to build hours or old f***s like me who think it's fun. I have a hard time believing there's someone out there making a killing at it by gouging customers.

As for all lawyer stuff, I think someone else said it better than me. If the deal feels like something you need a lawyer for then you should keep looking.
 
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Firepac said:
I'm currently in the process of purchasing a SR22 with the purchase agreement already drafted. Is it generally recommended to hire an aviation lawyer to oversee the closing?

The only issue I'm concerned about is the repositioning fee of the aircraft. The seller and I have verbally agreed that I am responsible for "Fuel for Flight," "Ground Transportation," and "Airline Ticket." I just don't want to end up being responsible for unforeseen expenses such as hotels if their flight back home gets delayed or cancelled.

The purchase agreement defines repositioning expenses as "any direct costs associated with the repositioning of the AIRCRAFT for the purpose of this transaction, to include fuel, pilot services and travel expenses." Is it to my interest that this gets changed to something else?

Also the seller wants to use AIC Title Services for the escrow. How's their reputation?
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I have bought over 30 airplanes and never wrote up a dumb purchase agreement....
You find a plane, go look at it and if it is nice you buy it... If you don't like it you go back home. Pretty simple.
I like simple...
I never use escrow... If you like the plane write a check, If your not happy don't write a check.
I had my 172 sold to a guy that wanted to do all the escrow and difficult crap. I told him to go find another plane. 2 days later a different guy showed up with a cashiers check and flew it home
Your buying a Cirrus and your worried about hotel cost for the seller bringing it to you???
That's the craziest thing I have ever heard. If it was me I would pay to put him in the nicest hotel around since he is doing you a favor!
 
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aftCG said:
I've ferried many airplanes. Most were sketchier than implied. I've flown planes with fresh annuals " " that developed electrical problems, fuel leaks and failing gyros. Gear problems? Yep.
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Know someone in the ferry biz who has had not one, but two forced landings due to engine failures on “fresh annuals”. One ended up on an airport, one ended up on a dirt road in ... ironically since you mentioned it, Texas.

Ferrying is Russian Roulette for the pilots. Pay them. They’ll enjoy that your airplane wasn’t part of the majority with problems that they get to experience first, instead of you.

pigpenracing said:
Your buying a Cirrus and your worried about hotel cost for the seller bringing it to you???
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This. Even in the Ritz Carlton it’s a tiny percentage of what you’ll spend on the airplane and operating it over the time you own it.
 
pigpenracing said:
I have bought over 30 airplanes and never wrote up a dumb purchase agreement....
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That has got to be one of the scariest advice I've ever gotten.

So according to you anyone who writes a purchase agreement is dumb. In fact the seller is the one who wrote and insists on a purchase agreement. And if you're financing, good luck convincing the bank that you don't need a purchase agreement.

Do you skip the prebuy inspection and title search as well?

denverpilot said:
This. Even in the Ritz Carlton it’s a tiny percentage of what you’ll spend on the airplane and operating it over the time you own it.
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A Ritz Carlton is a tiny percentage of what I'm paying the lawyer. But even the lawyer is a tiny percentage of what I'm paying for the plane. I don't understand the point.
 
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AIC is fine ... used them and AOPA before. Last purchase just gave the guy a check.

I made purchase agreements both selling and buying. For both, ALL ADs addressed and no issues regarding airworthiness ... all other issues would be listed and negotiated from the sell price. I transported my Tiger to FletchAIR for the buyer and put that if he didn't purchase it, he would pay for me to go retrieve it; otherwise, no additional charges. I never charged a deposit, but paid one on the RV I purchased last year.
 
Firepac said:
That has got to be one of the scariest advice I've ever gotten.

So according to you anyone who writes a purchase agreement is dumb. In fact the seller is the one who wrote and insists on a purchase agreement. And if you're financing, good luck convincing the bank that you don't need a purchase agreement.

Do you skip the prebuy inspection and title search as well?



A Ritz Carlton is a tiny percentage of what I'm paying the lawyer. But even the lawyer is a tiny percentage of what I'm paying for the plane. I don't understand the point.
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I do my own prebuy inspections.... It isn't rocket science.
You can tell by looking at a plane if it is junk or if it is well maintained.
If you pay for a high dollar prebuy who says the engine can't take a crap 5 hours after that?
Have fun...
 
pigpenracing said:
I do my own prebuy inspections.... It isn't rocket science.
You can tell by looking at a plane if it is junk or if it is well maintained.
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So you don't audit the logbooks at all. You can tell "just by looking at a plane." Do you do your own title search as well? Thanks for letting me know not to take your advice seriously.
 
Ravioli said:
Obviously no purchase agreement you wrote could be anything other than brilliant. <- crackin' myself up again
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So what is a purchase agreement?? A piece of paper that says you will buy the plane if you like it basically.
If I like a plane I will send the seller a $5000 depositIf I look at the plane and its nice I buy. If it isn't nice I get my 5 grand back.
Simple...
 
Since you missed the joke:

If you send a deposit, and look at the plane and it isn't "nice," how do you enforce getting your money back? Also, how is "nice" defined? Airworthiness, conformance/agreement to condition as advertised, goosebumps on your... arm?

Purchase agreements may not be needed for your 30 plus purchases and sales.

But for the REST of the world they are needed, and sometimes worth far more than the paper they're written on.

I've only purchased one plane. Personal check for the (refundable) deposit, certified check for the balance. Worked out great, but there was a written agreement.
 
Ravioli said:
Since you missed the joke:

If you send a deposit, and look at the plane and it isn't "nice," how do you enforce getting your money back? Also, how is "nice" defined? Airworthiness, conformance/agreement to condition as advertised, goosebumps on your... arm?

Purchase agreements may not be needed for your 30 plus purchases and sales.

But for the REST of the world they are needed, and sometimes worth far more than the paper they're written on.

I've only purchased one plane. Personal check for the (refundable) deposit, certified check for the balance. Worked out great, but there was a written agreement.
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I understand..
Most the purchase agreements are written so confusing that you need a damn lawyer to read it.
I guess that is why the buyer here is asking if he should hire a lawyer :)
He can't understand the dumb agreement he has :D
I usually only look at top notch airplanes and not the cheap junky ones and so far I have not backed out of buying one.
If the seller don't want to refund me then I would have to beat his ass :rolleyes:
 
pigpenracing said:
So what is a purchase agreement?? A piece of paper that says you will buy the plane if you like it basically.
If I like a plane I will send the seller a $5000 depositIf I look at the plane and its nice I buy. If it isn't nice I get my 5 grand back.
Simple...
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Says who? The default position on deposits in most states is that it is a payment in consideration of taking something off the market - not selling it to someone else pending a transfer - and is non-refundable.
 
pigpenracing said:
I do my own prebuy inspections.... It isn't rocket science.
You can tell by looking at a plane if it is junk or if it is well maintained.
If you pay for a high dollar prebuy who says the engine can't take a crap 5 hours after that?
Have fun...
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Yup. My buddy bought a Bravo two months ago for 220K (2 partners). Mooney service center blah blah blah don maxwell blah blah blah. Straight up housing level closing transaction kabuki. Annual comes up, 2 cylinders have burnt exhaust valves. But I tell people I've bought and sold airplanes on what they mockingly call a "kick the tires light the fires" basis (aka what they consider I'm effectively doing by doing my own log/docs/flight inspection as a non-AP) and it's all of a sudden blasphemy. I've yet to tear into a recently bought airplane/engine in the 10 years I've been wasting my money on this blasted hobby.

I do admit, I don't buy high dollar airplanes, so perhaps my relative flippancy is warranted. To each their own. My monkey my circus.
 
Why not hire a ferry pilot, seperate from the transaction. Seems like it would be much cleaner.
 
midlifeflyer said:
Practical question. As long as you are paying those expenses anyway, why not you and a CFI, and fly your airplane home? At least then you have complete control over the expenses.
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The engine might quit. Let the ferry pilot deal with that. LOL. :)
 
Firepac said:
So you don't audit the logbooks at all. You can tell "just by looking at a plane." Do you do your own title search as well? Thanks for letting me know not to take your advice seriously.
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There are planes in the world who are priced due to circumstances (estate sale, owner lost medical, divorce, etc) that a pre-buy is not only irrelevant, it is insulting. The basics of "is it airworthy right now" is usually enough.

For instance, I hate selling things with a passion. I'd rather just pick a firm price about 15-20% under market, make any pre-buy inspection pass/fail (if you don't like it, don't buy it, but no additional discounts will be considered), and let the tire-kickers tie themselves in knots about what a roach the plane must be. Haven't heard any complaints.


I've transacted with and without prebuys, and generally without purchase agreements (not always). I can't paint any scenario with a specific brush without knowing the particulars.

Assuming you're buying a market-rate cirrus, priced fairly, you're right to have due diligence done in both escrow, purchase agreement, and prepurchase inspection. Doubly if you're new to the plane buying game (I don't know if you are or aren't) I still think worrying about making the deal ironclad and proof against any and all skulduggery is a fool's errand. It can't happen. Aviation is chock full of shady mofos who know a million ways to screw you over. Sniffing them out is part luck and part experience.

Price your worst case. Enjoy your plane. Let the ferry pilot sleep wherever he wants. If he presents you a ridiculous bill, feel free not to pay him.

Have a nice weekend. :D
 
Have you checked on insurance? You may need specific training and some amount of time with an instructor before you can be covered.
 
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