Buyer's Brokers cost

[smccray]

'78 J just listed in the classifieds.  It's a wholesale deal though- so traditional approach to purchasing with a separate prebuy isn't in the cards.  That's the type of deal where a deal is possible, but there are significant risks.  For a first time buyer it may be too big a stretch.  I've owned one J model and my recent purchase is my second plane- I'm not sure I know enough to get into a deal like that.

[jaylw314]

22 hours ago, RobertGary1 said:

This is a buyer’s broker. He has no relation to the seller. 

-Robert 

Depending on the relationship, though, he may have a stake in the sale or no-sale.  If, for example, his fee was percentage-based, and he knew there was a more expensive plane he was looking at next week, he would have a motive to discourage the buyer on a less expensive plane this week.  There may be other conflicts-of-interest other than money--reputation, relationship to the buyer, time, etc.

[jaylw314]

 

22 hours ago, ChrisV said:

I'm looking to stay under $100K for a 201.  The broker is not going to avoid the pre-purchase, he is going to do it. I think his value is that he is an A&P, an airplane appraiser, and a mooney guy.  When I first started looking about a year ago I considered not getting a pre buy inspection.    The pilots I work with convinced me otherwise.  And that has been backed up on MS.

I have to admit, when I looked at J's, it seemed the cost/value distribution was bimodal--there was a whole bunch of J's in the $65-80k range, and then a smaller bunch in the $100-120k range.  There just didn't seem to be many in the $80-100k range.  I wonder if those just never make it on the market because they are in such demand.  I wanted to look at a J that was $95k that was being sold through a broker, and the broker seemed lazy and almost completely uninterested in making any time to show the plane.  Sure enough, the plane was under contract a month later.

Anyhow, I think my point is be prepared to be looking for more than just a few months.  If you can stretch your budget over $100k, that might get you a few more choices.  When I toyed with the idea of selling, the guys at All-American said they had at least 20 people waiting for suitable J's to turn up.

Incidentally, I'm down in Corvallis, and I know there're a couple other people with J's in the area.  Let me know if you want to poke around mine, it's an '86 J

[ChrisV]

Jay, I may have to take you up on that.  Unfortunately I am 7000 miles away right now.  I will hit you up when I get home in a few months.

[RobertGary1]

5 hours ago, jaylw314 said:

Depending on the relationship, though, he may have a stake in the sale or no-sale.  If, for example, his fee was percentage-based, and he knew there was a more expensive plane he was looking at next week, he would have a motive to discourage the buyer on a less expensive plane this week.  There may be other conflicts-of-interest other than money--reputation, relationship to the buyer, time, etc.

I guess you could say the same of most brokers/agents include real estate agents. 

-Robert 

[Guest]

On 10/19/2018 at 6:44 AM, ChrisV said:

First time buyer considering using a buyer's broker.  I met an independent broker many months ago who is an A&P, aircraft appraiser and flies a gorgeous 201.  His fee is $3500 + travel expenses and + transition training (which I will need).  His fee covers finding a suitable aircraft, conducting the pre-purchase evaluation, and transporting the plane back to me.

What are your thoughts on using a buyer's broker?

What are the typical costs?  His fee seems high to me since I am finding my own aircraft and will transport it home.

If the first one he finds doesn’t work out, how many more will he look at for your for the same fee?

Clarence

 

[MIm20c]

I’d start by looking at what the broker has for sale. From your post above it sound like he is asking $150k for his J. Not many can command that price, if his is not worthy than I’m not sure how in touch he is with the market.  It also sounds like you are out of the country for another couple of months. Start making a list of the planes that fit your needs and how fast they sell. This might put you more in line with the market and able to act fast when a good one comes along after you return. 

If I were in your shoes I’d be talking with AAA. 

[jaylw314]

3 hours ago, RobertGary1 said:

I guess you could say the same of most brokers/agents include real estate agents. 

-Robert 

exactly.

[jrothen4]

First time poster and brand new (as of Friday) Mooney M20J owner. Once I saw it on the field last week and listed on Trade-A-Plane, I snapped it up. It was my first airplane purchase other than a fractional ownership in a 1968 Cherokee. The process on my own was fairly easy, just a lot of emailing and phone calls back and forth, but I made an offer on  Monday and closed on Friday. The insurance was a huge shock since I have no retractable time.....good luck!

[ChrisV]

Ahhhh  Jrothan, that was one I was keeping my eye on.  If my hangar was available, I would have sent the broker to pick this one up asap, and written a check for his fee.  Very nice!

I think the broker fee will be worth it if he can pick something up before I get home.  

[carusoam]

It’s an early Sunday morning... And I have already lost control of the font for this post....

 

We are sitting in the front row... watching how market forces act... in a small and limited airplane market.  Very similar to observing Schroedinger‘s cat in the trunk...

Next steps...

Hangars will be rented in preparation of airplane ownership. Similar to painting the baby’s room before he/she/they arrive...

That step can cost an amu every two months...

Its been about 11 years since the last time I heard somebody ‘snap up’ a 120amu plane...

The broker’s fee has just become a drop in the bucket...

Sort of... The price of doing business...

 

The economy has been expanding for the last 11 years straight... unemployment is at the lowest in several decades...  There has been no inflation in years... Some people are even getting pay raises...

The financial markets are just off their all time highs... E-trade ads have gotten over the top goofy again... Job hopping is being advertised on television as a normal activity...

 

An independent PPI is still the best protection for your wallet. In good times and in bad...

An all-in-one (buyers agent, ppi, TT, etc...) service is starting to look more like a lot of convenience at a cost that isn’t readily obvious... maybe an ‘opportunity lost’ cost? Pretty hard to tell until after it is all over...

I think we have unwrapped the buyer’s broker term...? At least maybe we have...

We are talking about a buyer’s agent. A person that helps a buyer through this purchasing process...

A broker is a person that helps sellers through the same process, just representing the other side...

The more people involved in a transaction, the more expensive they usually become...

Being out of the country doesn’t make anything easier...

I never bought anything expensive without seeing it first... even if it required traveling thousands of miles to to do so... (often combining business trips with machine hunting exercises...)

One thing...(possibly?) for sure... if you go through all this effort, and the paint color doesn’t quite match expectations or look as nice as the pictures indicated... you can always sell it...?

What we learned from Schroedinger... the act of observation, can alter what is happening to what we are trying to observe...

Jim over there... is now preparing the rocket nets... (Mutual of Omaha’s Wild Kingdom reference regarding Mooney acquisition)

Let the good times roll... and all that Jazz...

PP thoughts only, not a plane sales guy, and ... boy, @Jeev Jeev’s (now @jrothen4‘s) plane sure looks great..!

Best regards,

-a-

[carusoam]

12 hours ago, RobertGary1 said:

I guess you could say the same of most brokers/agents include real estate agents. 

-Robert 

Real estate gets a bunch of regulation designed to protect consumers...

Some states require lawyers to be involved in transactions...

Engineers get hired to perform (PPIs) engineering inspections...

The whole transaction is detailed in a document similar to a purchasing agreement...

The real estate broker also has some hurdles to get over, including licensing...

For airplanes... lotso regulations, but few regarding the purchase and sale of the machine itself...

No lemon laws here...

Fortunately, we have MS... the alternative was to be in the dark reading long unsearchable email chains...

Best regards,

-a-

[Jeev]

19 hours ago, jrothen4 said:

First time poster and brand new (as of Friday) Mooney M20J owner. Once I saw it on the field last week and listed on Trade-A-Plane, I snapped it up. It was my first airplane purchase other than a fractional ownership in a 1968 Cherokee. The process on my own was fairly easy, just a lot of emailing and phone calls back and forth, but I made an offer on  Monday and closed on Friday. The insurance was a huge shock since I have no retractable time.....good luck!

Welcome to Mooneyspace James!!!! This is a great place to get comfy with Mooneys.  I have had so much help from all these guys to make 1YG the plane it is today!!! I miss my Mooney already but I am very happy it will be staying on the field!! Cheers and it was great working with you.

[Jeev]

Regarding the buyers agent question it really comes down to how much time you have and how comfortable you are with the make and model you are buying.  The process is not hard but it is time consuming.  If you are financing regardless if you have an agent or not you will have to do most of the back and forth with finance. Where an agent really helps is finding the aircraft that meets your specs, often times you will have to go see 3 or 4 aircraft before you find the "one".  After you locate the plane a competent agent will draft an agreement, set the terms, locate a shop that specializes in or has a lot of experience with the make and model, set up escrow, set up transition training / ferry services and a few other things.  Like I said it's not hard just time consuming.  I also work as both a broker and buyers agent and charge a flat fee of $2,500 ($500 as a retainer and $2000 at closing) plus travel when I work for the buyer.  I personally like the process of buying and selling but some do not, the customers who retain my services are busy or first time buyers who want some help.  If you are the type of person who likes to get involved I would recommend you do it yourself but use escrow, it makes it easier and ensures all the proper paperwork gets filed. If you go through Aerospace reports its only $300 or so bucks each for the seller and buyer, money well spent.  If you need some help or have questions feel free to reach out, my advise is always free .  One more thing, as some have said aircraft broker/buyers agents are unregulated and unfortunately there are some sleazy people out there.  Be wary of anyone who wants the whole fee up front and does not ask a lot of questions about your mission, budget, pilot experience and maintenance strategies.  Good luck and please remember to have fun, these are airplanes after all!!!!