What Would You Do: Pre-Buy

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Mr. Cake

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Mr. Cake
Hi everyone,

New to the board, but I have a couple of questions that I need some feedback on.

The pre-buy is back on a plane I'm considering. These are the facts regarding the plane:


  • I'm buying the plane 36% below the seller's asking price. The purchase price is also $7000 below VREF.
  • The purchase agreement states the seller will fix the list of discrepancies.
  • A very trusted A&P in this "brand" of aircraft has come up with about $3000 worth of repairs. Of this $3000, about 75% are airworthiness items.
  • The seller has agreed to fix about $1000 worth of repairs. He is wishy-washy on the other repairs.
With the above facts, what would you do? Would you hold him to all the repairs? Would you hold him to just the airworthiness repairs?


The plane is a heck of a deal. The seller wants it gone. (He has another plane to play with.) Other than these repairs, the A&P says this is a very solid plane.



Thanks!


Chuck
 
Just numbers only, if you have to put $2000 in it, you're still $5000 below VREF.

This "trusted" A&P... you find and hire him or is he involved with the seller? You want him to be "your guy" for this transaction.
 
I'm not quite sure how to answer your question, so I'll leave it to the resident pros, but welcome to the POA!
 
What else needs to be done down the road? You can eat up $5k in one annual.
 
All depends on the entirety of the deal's bottom line as well as what airplane it is and the comps on the market. Every deal is its own. If the plane is still a good plane and a good value, it can still be a good deal.
 
Not enough to go on, but a couple of factors to think about. Did you have a thorough pre-buy done? If so, you have some money invested already, and a reliable condition report. Is your investment in that condition report worth walking away from on a good airplane over $2,000? Another plane, you'll have to spend it again, and who knows what will result.
You could offer to split the difference. Or he pays parts, you pay labor. Or depending on how serious the items are, do the repairs yourself under supervision.
Are you being greedy, or standing on principle rather than being flexible on what may be good deal?
Only you can answer.
 
Is this pre-buy an Annual inspection, or just a look around?

I purchased a few years ago and I can tell you all about large "after pre-buy" annuals that I have gone through to fix things that I should have found the first time around.

In my opinion there is no substitute for a full annual inspection by a GOOD A&P/IA to find the real issues. That $3,000 that was found could have $5,000 more to do if you were to really take things apart to inspect as you would during an annual.

Not enough to really go on here, but I am currently in the middle of what is going to be an expensive annual because the former owner did not wire the battery box correctly and there is now corrosion and other issues to deal with. Some of that is my not looking correctly, some should have even been found in the former annuals.

In a sense it is a crapshoot though as well because even if everything looks great, things can and do go wrong. If you are able to fix it up after purchasing and "make it your own" then go for it if there are no large issues.
 
denverpilot said:
This "trusted" A&P... you find and hire him or is he involved with the seller? You want him to be "your guy" for this transaction.
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This is my guy. However, the A&P has seen this plane before. It has been a couple of years.
 
Oh, we are talking about a Grumman Tiger.
 
I'd look at the total cost and figure out if I can live with the seller being wishy washy about the rest.

Personally, my Aztec is for sale, having come out of a recent annual. The price is the price as-is. Potential buyers are welcome to inspect all they want at their expense, but any repairs they want to make will be made at their expense as well. They can offer me a lower price if they feel the plane is worth less. So I understand where the buyer is coming from, and don't think it's entirely unreasonable. You can offer him a lower price to offset the repair costs, or just accept it and buy the plane.

Make sure you're happy with the decision.
 
Keep in mind that most of the airplanes we are dealing with now are several years old. Very few are "perfect." It's not like buying a new car with a warranty.
 
Further thought. Guaranteed something bad will come up with any machine, including aircraft, eventually.

One rule of thumb that virtually guarantees success is, "If you're not cash flow positive enough to replace the engine tomorrow, you're not ready to own."

Obviously that's a huge over-simplification, but it does hold some water.

You need to be ready to own financially, far more than you need to "jump on a good deal" in this buyer's market. The deals will continue to be there for the taking.

If a $5000 price difference is a significant reason you'd sink ten times that into an aircraft, beware of your emotional state.

Ownership has perks but also has inevitable large cash repair bills, sooner or later.

Same thing bites new homeowners too, but the motivation is higher to maintain the place you live in, versus a completely optional expenditure like an aircraft.
 
jdangel said:
Is this pre-buy an Annual inspection, or just a look around?

I purchased a few years ago and I can tell you all about large "after pre-buy" annuals that I have gone through to fix things that I should have found the first time around.

In my opinion there is no substitute for a full annual inspection by a GOOD A&P/IA to find the real issues. That $3,000 that was found could have $5,000 more to do if you were to really take things apart to inspect as you would during an annual.

Not enough to really go on here, but I am currently in the middle of what is going to be an expensive annual because the former owner did not wire the battery box correctly and there is now corrosion and other issues to deal with. Some of that is my not looking correctly, some should have even been found in the former annuals.

In a sense it is a crapshoot though as well because even if everything looks great, things can and do go wrong. If you are able to fix it up after purchasing and "make it your own" then go for it if there are no large issues.
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Ugggg, Here's the deal, you can't do an 'Annual Inspection' on a plane until you own it. You can have a 'Preview Report on Conditions as Set Forth by Manufacturer Requirements for Continued Service at Annual Inspection'.

If an 'Annual Inspection' is done that requires a log book entry and you don't have that right until you own it, so no 'Annual Inspection' as prebuy please.
 
Wrong. You can include whatever you want as part of the inspection, including use of the annual inspection guide as the scope of work. No repairs will be performed and nothing of consequence will be signed off or entered in the logbook until the deal is closed. Pragmatic shop owners understand the hair-splitting and other BS in the regs and know how to deal with it.

QUOTE=Henning;899352]Ugggg, Here's the deal, you can't do an 'Annual Inspection' on a plane until you own it. You can have a 'Preview Report on Conditions as Set Forth by Manufacturer Requirements for Continued Service at Annual Inspection'.

If an 'Annual Inspection' is done that requires a log book entry and you don't have that right until you own it, so no 'Annual Inspection' as prebuy please.[/QUOTE]
 
Walk away. There are other airplanes.

I'd worry (a lot) about an airplane that comes up with $3K worth of airworthiness repairs on a pre buy. What will it's first annual reveal? Moreover, it's just a Tiger, not the space shuttle. What's so busted? How'd 3K worth of stuff get busted and escape annual? Don't like, not one damn bit. Remember, once you buy it, it's yours.
 
steingar said:
I'd worry (a lot) about an airplane that comes up with $3K worth of airworthiness repairs on a pre buy. What will it's first annual reveal? Moreover, it's just a Tiger, not the space shuttle. What's so busted? How'd 3K worth of stuff get busted and escape annual? Don't like, not one damn bit. Remember, once you buy it, it's yours.
Click to expand...

I'm sure I could find $3k worth of repairs that your plane needs if I wanted to on a prebuy. So does that mean it's a POS?
 
Ted DuPuis said:
I'm sure I could find $3k worth of repairs that your plane needs if I wanted to on a prebuy. So does that mean it's a POS?
Click to expand...

If you can find $3K worth of airworthiness items on my Cherokee on a cursory inspection, don't buy it. No worries, it ain't for sale. Guy asked for opinions, I gave mine. Sorry you don't like it.
 
A little more aircraft history would help, but IMHO all this VREF etc is all subjective. Bottom line - anything is only worth what someone is willing to pay for it. Make your offer and stick to it. Odds are, with what you've said so far, especially the "Wishy-Washy" part, there's a chance he'll eventually come around. If he doesn't take it, move on to something else. There is definitely not a shortage of airplanes on the used market.
 
wabower said:
Wrong. You can include whatever you want as part of the inspection, including use of the annual inspection guide as the scope of work. No repairs will be performed and nothing of consequence will be signed off or entered in the logbook until the deal is closed. Pragmatic shop owners understand the hair-splitting and other BS in the regs and know how to deal with it.

Henning said:
Ugggg, Here's the deal, you can't do an 'Annual Inspection' on a plane until you own it. You can have a 'Preview Report on Conditions as Set Forth by Manufacturer Requirements for Continued Service at Annual Inspection'.

If an 'Annual Inspection' is done that requires a log book entry and you don't have that right until you own it, so no 'Annual Inspection' as prebuy please.
Click to expand...
Click to expand...

It's not my fight, Tom Downey will likely be along shortly....
 
steingar said:
Walk away. There are other airplanes.

I'd worry (a lot) about an airplane that comes up with $3K worth of airworthiness repairs on a pre buy. What will it's first annual reveal? Moreover, it's just a Tiger, not the space shuttle. What's so busted? How'd 3K worth of stuff get busted and escape annual? Don't like, not one damn bit. Remember, once you buy it, it's yours.
Click to expand...

Well that's the point of the inspection, to find out while it is still someone else's responsibility.
 
So you want your cake and eat it too? :D

So you have a projected $2K difference in what you and the seller are willing to do to make the deal happen. How much do you want the plane? Sounds like it is a pretty good deal, but again we don't have a lot to go on.

If you want to make it happen see if he'll go another $500, basically to make you "feel" better, so in effect you are splitting the $3K in discrepancies 50/50.
 
That is a given, but immaterial to the issue of what can be done. Some of the shops that I work with do more pre-buys in a year than one-man shops do in ten.

With respect to Cake's deal (and many others that we review each year) his problem could and should have been addressed and thereby avoided by appropriate language in the purchase agreement.


Henning said:
It's not my fight, Tom Downey will likely be along shortly....
Click to expand...
 
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wabower said:
Wrong. You can include whatever you want as part of the inspection, including use of the annual inspection guide as the scope of work. No repairs will be performed and nothing of consequence will be signed off or entered in the logbook until the deal is closed. Pragmatic shop owners understand the hair-splitting and other BS in the regs and know how to deal with it.

QUOTE=Henning;899352]Ugggg, Here's the deal, you can't do an 'Annual Inspection' on a plane until you own it. You can have a 'Preview Report on Conditions as Set Forth by Manufacturer Requirements for Continued Service at Annual Inspection'.

If an 'Annual Inspection' is done that requires a log book entry and you don't have that right until you own it, so no 'Annual Inspection' as prebuy please.
Click to expand...
[/QUOTE]


Wayne you can do any thing as a pre-buy that the owner will allow you to do. and that's all.

that's why the sales contract is so very important.
 
Henning said:
It's not my fight, Tom Downey will likely be along shortly....
Click to expand...

It is my humble opinion, that you can spend a lot more than 3-4K trying to find any other aircraft, and take the change of it having 3-4k worth of discrepancies too.

If the 3-4k worth of discrepancies are the only factor being considered, buy it, and be sure it gets fixed to your satisfaction.

3-4k worth of repairs isn't squat, in todays prices of labor, parts, and shop rates.
 
Agreed, but important for shop to have an approved and well-defined work order from both buyer and seller since he may be doing work for both.

Wayne you can do any thing as a pre-buy that the owner will allow you to do. and that's all.

that's why the sales contract is so very important.[/QUOTE]
 
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wabower said:
Agreed, but important for shop to have an approved and well-defined work order from both buyer and seller since he may be doing work for both.

Wayne you can do any thing as a pre-buy that the owner will allow you to do. and that's all.

that's why the sales contract is so very important.
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[/QUOTE]
The most important thing in any sale, is a total understanding of what is expected by each party.

Personally I advertise my aircraft as is, where is, and make no claims, as to condition, and price it accordingly.

Any method of doing that, which is acceptable by both and can be proven after the fact is good to go, it matters not, if it is chiseled in stone or scribbled on a note pad.
 
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Mr. Cake said:
With the above facts, what would you do? Would you hold him to all the repairs? Would you hold him to just the airworthiness repairs?


The plane is a heck of a deal. The seller wants it gone. (He has another plane to play with.) Other than these repairs, the A&P says this is a very solid plane.



Thanks!


Chuck
Click to expand...

If I were your seller, I'd tell you stop quibbling and buy or walk.
If the cost of those repairs is the difference between buying or not, you are not ready to buy. You should have a maintenance reserve equal to or more than the selling price of the aircraft, because it just might sh-- an engine on the way home.
 
wabower said:
That is a given, but immaterial to the issue of what can be done. Some of the shops that I work with do more pre-buys in a year than one-man shops do in ten.

With respect to Cake's deal (and many others that we review each year) his problem could and should have been addressed and thereby avoided by appropriate language in the purchase agreement.
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Yep, I understand fully, as I said, not my fight, ain't gonna argue it further lol. I agree fully, just suggesting 'appropriate language' to use in a technically odd setting.
 
steingar said:
I'd worry (a lot) about an airplane that comes up with $3K worth of airworthiness repairs on a pre buy. What will it's first annual reveal?
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Unless I mis-understood him, the $3k was determined through the use of an annual inspection as the pre-buy.

I don't know anything about Tigers, but I suspect that ~$3k of repairs on a first annual with a new A&P IA is not unreasable of most older GA airplanes.
 
Tom-D said:
It is my humble opinion, that you can spend a lot more than 3-4K trying to find any other aircraft, and take the change of it having 3-4k worth of discrepancies too.

If the 3-4k worth of discrepancies are the only factor being considered, buy it, and be sure it gets fixed to your satisfaction.

3-4k worth of repairs isn't squat, in todays prices of labor, parts, and shop rates.
Click to expand...

I don't disagree with you and bought my plane at a very fair asking price with several known discrepancies accepted on departure with no hard feelings or great surprise given the conditions. I felt it a great value regardless and I believe that still today especially after my panel investment. Without the panel I'm not sure the plane is worth it, but with the usage value the panel adds it immediately becomes a great value.
 
wabower said:
Agreed, but important for shop to have an approved and well-defined work order from both buyer and seller since he may be doing work for both.

Wayne you can do any thing as a pre-buy that the owner will allow you to do. and that's all.

that's why the sales contract is so very important.
Click to expand...

That's why it is important to use wording that protects all interests while still allowing to use a standard set of definitions to be applied as a base for the report generated; something everyone will sign.
 
Henning said:
I don't disagree with you and bought my plane at a very fair asking price with several known discrepancies accepted on departure with no hard feelings or great surprise given the conditions. I felt it a great value regardless and I believe that still today especially after my panel investment. Without the panel I'm not sure the plane is worth it, but with the usage value the panel adds it immediately becomes a great value.
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GREAT VALUE, is in the eye of the buyer.. I wouldn't want your aircraft at any price.

Not that its a bad aircraft. I'm an A&P-IA and I couldn't afford to fly it.
 
The other thing to consider, and that I haven't seen mentioned (but may have missed), is how well does the buyer know the A&P that performed the inspection?

I am aware of a pre-buy done recently in which $3,600 of discrepancies was listed on a plane that just went through a legitimate and thorough annual.

"Flap tracks and rollers worn" was one example and there was a hefty price tag to replace them. But they weren't even close to being worn to the established limits.

By definition, a used airplane will be worn. If it wasn't worn it'd be new.

The question is not "is it worn?" but rather "how worn is it?" and how many years/hours until it reaches the limits. And many (most?) systems have established limits.

Be aware that if you, as a buyer, don't have a working relationship and full faith in the honesty of the inspecting mechanic, then he may be simply looking to make a boat payment. I've found that some mechanics, unfortunately, see a pre-buy as a way to force feed maintenance issues, whether real or fabricated, onto someone. This is especially tempting for a mechanic to do if the buyer hasn't seen the plane in person. But, when the fabricated list gets too long, and the deal blows up because of it, no one wins.
 
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timwinters said:
I am aware of a pre-buy done recently in which $3,600 of discrepancies was listed on a plane that just went through a legitimate and thorough annual.
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I did one last summer, one DAY out of annual by a reputable CRS and I was over the $10k mark within an hour with only a partial decowl. I have no faith in my fellow mechanic and expect them to have none in me.

"trust but verify"
 
BTW Tim, my prebuy lists are LOOOOOOONG and include every little thing, like your worn flap tracks.

I do it to provide the buyer with a good idea of the overall condition of the plane.

I also explain that there are limits and this plane is perfectly ok/not ok depending on what is found.
 
The Air Worthiness issues the OP brought up.
I think an important question is, are these things where the A&P said, "hey, I wouldn't fly this plane unless those are fixed" or are they things "hey, this is worn and will need to be repaired soon".
BIG difference IMHO.
 
It might start a howling, hissing, dog and catfight (great fun :)), but consider listing the discrepancies. What the seller is allowing to run down says a lot about him and whoever's working on the airplane.
 
rotorhead1026 said:
It might start a howling, hissing, dog and catfight (great fun :)), but consider listing the discrepancies. What the seller is allowing to run down says a lot about him and whoever's working on the airplane.
Click to expand...
A list of discrepancies alone means nothing without the appropriate context. As Tim Winters pointed out regarding one A&P claiming the flap tracks were worn and required replacing. That is one A&P's opinion. What one guy says is unairworthy may very well be fully airworthy and safe for many more hours and vice versa.

The real question (and only the OP can answer this) is who do you trust and what is your personal comfort level?
 
Here we are, discussing who should fix what, how much it should cost, when we don't even know if the aircraft has a clean title.

Does the Buyer have the FAA history record CD in hand?
 
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