Purchase Process Checklist

[Freebird]

I read an article suggesting a process for purchasing a Mooney, but cannot find it.  Any suggestions?

 

Specifically, once I find a plane that I am interested in investigating for sale, how do I tie it up to begin the pre-buy inspection?

 

Thank you,

[FAST FLIGHT OPTIONS LLC]

There's nothing special about buying a mooney vice any other plane.You take some $$$, put it into an escrow account and sign a contract indicating the sale is contingent upon whatever stipulations you all agree to. If your financing the bank will walk you through the process as it's not all that difficult. I would not pay cash for this reason. Finance the deal use a bank that knows what they are doing (Bank of America) and they will take care of 99 percent of the transaction as they are going to be looking out for their financial interest. Once you wrap up the deal most loans don't have a pre payment penalty if that's what you want to do

[BigTex]

Go visit APOPA's website.  They have a wealth of knowledge on purchasing the an aircraft.  They go into great details from tips on finding the right aircraft through the pre-buy to closing on the plane.  They even have a sample contract they recommend using. 

 

I would also strongly recommend using an escrow company.  I used AIC and they were fantastic.  They walk you through the entire process and makes the purchasing process a breeze.

 

Good luck.

[Bob_Belville]

I think the AOPA site has a good bit of helpful info...

[DonMuncy]

If memory serves, Jimmy Garrison at All American had an article in the MAPA Log a few months ago. If you are not a MAPA member, PM me and I will hunt it down and send it to you.

[laytonl]

Basically I agree with what Nick said in a previous post except for using a bank. This is my view, step by step.

1. Find the airplane you want.

2. Negotiate a price with the seller including in special conditions, such as number of days to complete the Pre-buy, how closing will be handled, deposit, etc.

3. Write up a purchase agreement (usually the seller does this.)

4. Sign the agreement and send the seller a deposit, or better yet, use an escrow service. I like Aero-space Reports for escrow and title search. I believe they charge around $600 for the title search and handling the closing.

5. Get the title search and Pre-buy completed and negotiate any issues found in the Pre-buy. The MAPA website has a good document about items to check during the Pre-buy.

6. Transfer funds to seller and have seller sign the registration transfer. Again, this is all best handled by an escrow service.

That's it. What have I missed guys?

Lee

[Awqward]

Insurance?

[carusoam]

How A/W issues are handled during the PPI...

Best regards,

-a-

[Freebird]

Great comments.  Thank you.  I am a member of AOPA and MAPA.  I'll look for those articles.

 

Looks to me like I have work to do before deciding which plane is right for me.  I am clear on my mission and although the load carrying capacity of a J is a bit light, I believe it is the right plane for me.  As I look at planes for sale, I realize it may take me awhile to figure out what equipment I need.  I may also need to spend time understanding the condition of different planes and what that means.

 

This will be my first plane therefore I am so unexperienced!  It seems silly to start with a trainer and incur several buys and sales before I get to the plane I want. 

[29-0363]

That's it. What have I missed guys?

 

After having done everything on the list, what do you do if the vendor decides not to sell?  It happened to me in 2006 after depositing 90K in escrow, a signed agreement and spent 2K on a pre-buy.

 

I could have taken the legal option but it would be messy and costly, or as it happened I walked away and got the escrow transferred to the airplane I eventually bought.  The vendor promised to reimburse me for the out of pocket expenses - I'm still waiting.

[DrBill]

I've purchased my two aircraft without escrow.  Since I have the money, I wrote the purchase agreement.  I included t's and c's relative to the prebuy.   All airworthy items are to be covered by the seller.  The seller may elect to cancel the agreement at prebuy by paying for the prebuy inspection. I'd go and see the plane, take it for a ride, and give the purchase agreement and a $1000 deposit after we argeed on price. .  We would then arrange the prebuy (place already decided during the negotiation)  and basically the agreement says that upon successful prebuy inspection, I give the seller a cashiers check for the balance and he provides the FAA transfer paperwork (that I got from the local FSDO).  I would prearrange for insurance as of the day of prebuy inspection and would call them to activate if all went well. 

If I cancelled the sale, I pay the prebuy and seller keeps the deposit.

During the ride, I would check ALL avionics for operation. I also got my own title search prior to the agreement (AOPA).

 

Bill

[DAVIDWH]

"AND ABOUT THOSE STATE TAXES??"

 

Mooney purchase from an individual, similar to buying a lawn mower from a neighbor, no state taxes due.

 

However, if purchasing from an aircraft dealer who has registered the ac in the co. business name, different application and state

 

taxes will be due.

 

In my case, state taxes would have been in five figures as the aircraft was registered in the dealers LLC.

 

To end run this one, A.C. was registered on line in a Delaware corp. for about $500.00 and about 45 min. of computer time.

 

(Just Google Delaware corporations to find).

 

I used, Harvard Business Services, Inc located in Lewes, Delaware, 800-345-2577 and was very pleased with their customer

 

service. Prob. best to shop as there are several who offer this service. The state (usually snitched to by the FAA upon

 

registration of aircraft) is now totally out of the picture.  Guess Microsoft knew what they were doing when they registered their

 

company in Delaware.

[Skybrd]

I wonder if the days are coming that buying or selling an airplane will be as complicated as buying a house. I just bought a used car from a local dealer and they had us sign lots of papers and it was a pain. Houses are worse. I've bought and sold airplanes and it was easy with a simple sales agreement and easy forms to send to the FAA. Time and progress change things, I like the good old days. my 2 cents.

[Bob_Belville]

I wonder if the days are coming that buying or selling an airplane will be as complicated as buying a house. I just bought a used car from a local dealer and they had us sign lots of papers and it was a pain. Houses are worse. I've bought and sold airplanes and it was easy with a simple sales agreement and easy forms to send to the FAA. Time and progress change things, I like the good old days. my 2 cents.

I guess I should be ashamed to admit I bought my planes the old way. The seller agreed to fly the plane to Wilgrove. 2 hours, for an abbreviated PP inspect which I paid for, $220. The seller paid the gas coming down, I filled him up for his return home. $125. I made him a counter offer by email noting several items that would need attention, none airworthiness issues, rationale for my lower price. He accepted it the next day, by email. I did a title search and got a cashiers check. He got the Bill of Sale and FAA docs filled out and signed, flew back down where we exchanged the plane and papers for the check. We remain in contact, he's now a sailor.

[mooniac15u]

"Mooney purchase from an individual, similar to buying a lawn mower from a neighbor, no state taxes due."

 

In many states you would be expected to pay "use tax" on the purchase of an airplane from another individual. Many people choose not to do this and hope that their state revenue department doesn't find out but it would probably be wise to find out what the tax laws are in your state.

[ALP]

After many years of renting, I finally purchase my first plane last year. Once I knew I wanted a Mooney I followed mooneyspace learning all I could. Then I found a FBO that had a Mooney and did 10 hours with an instructor. My process was the same as Dr. Bill. The most informative thing was to download the "Plane Sense" booklet from the FAA. All the forms required are in the booklet as well as info on things like the title search. This info was great since I purchased from a private individual. Taxes were handled by my accountant.

[Hector]

"Mooney purchase from an individual, similar to buying a lawn mower from a neighbor, no state taxes due." In many states you would be expected to pay "use tax" on the purchase of an airplane from another individual. Many people choose not to do this and hope that their state revenue department doesn't find out but it would probably be wise to find out what the tax laws are in your state.

Use tax applies here in Florida. After I purchased my Mooney from another Florida resident things got busy and I did not promptly paid the use tax. A couple of months later I received a "friendly" letter from the state of Florida reminding me that I owed them use tax, interest, and penalties my advice.....pay the use tax promptly! Sent from my iPad using Tapatalk HD

[Freebird]

"Mooney purchase from an individual, similar to buying a lawn mower from a neighbor, no state taxes due."

 

In many states you would be expected to pay "use tax" on the purchase of an airplane from another individual. Many people choose not to do this and hope that their state revenue department doesn't find out but it would probably be wise to find out what the tax laws are in your state.

 

Here in California, our state Franchise Tax Board is aggressive in collecting use taxes.  It is my understanding that they get the FAA records and collect the use taxes.

[danb35]

"AND ABOUT THOSE STATE TAXES??"

 

Mooney purchase from an individual, similar to buying a lawn mower from a neighbor, no state taxes due.

While this may be true in your state, it isn't correct as a general proposition.  And even if you hide the purchase in an out-of-state corp or LLC, the tax is still legally due.  Depending on the state, there may be property taxes as well.