prebuy or annual?

[neilpilot]

27 minutes ago, gsxrpilot said:

I just pulled out the PPI report from Don Maxwell on my first Mooney. A 1964 M20C. He noted 19 Airworthy issues totaling about $6000 to correct. I bought the airplane on his recommendation and it turned out to be a wonderful airplane. I flew it for 400 hours and sold it for what I paid for it. 

BTW... there were an additional 18 Recommended items.

Similar experience when Don did the prebuy on our 65C back in 2012 - 25 airworthy issues and an additional 22 recommended items.

[Guest]

3 hours ago, Greg Ellis said:

Canadians are just friendly trustworthy folks.... 

To qualify this statement, I was born in Hamilton, Ontario.

Just down the road from Kitchener-Waterloo.

 

Clarence

[FlyingCanuck]

35 minutes ago, M20Doc said:

Just down the road from Kitchener-Waterloo.

 

Clarence

I had an engine failure in a PA28 north of Waterloo ca.2003. Put down in a field near Mt Forest. It was later found out that some of the maintenance records were falsified long before by another owner. Fortunately the off field landing was fine - they field repaired (swapped out) the affected engine parts, plowed the field (paid the farmer), and had the plane flown out - all on the insurance company's checkbook.

It has drilled into me the importance of (1) a good (very good!) prebuy, (2) a mechanic you trust, and (3) good insurance.

Edited October 21, 2020 by FlyingCanuck

[steingar]

Surprised to hear airplane owners spouting such nonsense.  Sorry, just how I see it gents.  I don't think I told you guys about the time I flew my freshly annualed Cessna 150 to a neighboring airport.  The resident mechanic looked it over and declared it had north of 7 AMUs worth of squawks to be airworthy.  Was he right?  Dunno, but he was soundly ignored.  That aircraft flew to Oregon  and back and is still flying.  Seems to like mountains.

Airworthiness is in the eyes of the mechanic.  I can pay for an uber expensive inspection/annual, but the opinion that counts is the guy I'm hiring to inspect the thing when I get home.  Now, were the airplane in my home district and the mechanic someone I planned to employ, then yes, the most thorough inspection/annual my pathetic bank account can buy.  Other than that, a look see to make certain there are no show stoppers. All I've ever wanted.  I spent a day with a mechanic on mine.  Couldn't find anything wrong. I was good with it.  No big surprises in a half dozen years.

All that said, I could go to a different mechanic and have the airplane declared unairworthy with 30 AMUs worth of discrepancies.  That's why I don't go to a different mechanic.

No way you buy a 50 year old airplane without some risk.  No shop, mechanic, or magic spell will eliminate that risk.  To think otherwise is pure foolishness.

[midlifeflyer]

53 minutes ago, steingar said:

Surprised to hear airplane owners spouting such nonsense.  Sorry, just how I see it gents.  I don't think I told you guys about the time I flew my freshly annualed Cessna 150 to a neighboring airport.  The resident mechanic looked it over and declared it had north of 7 AMUs worth of squawks to be airworthy.  Was he right?  Dunno, but he was soundly ignored.  That aircraft flew to Oregon  and back and is still flying.  Seems to like mountains.

Airworthiness is in the eyes of the mechanic.  I can pay for an uber expensive inspection/annual, but the opinion that counts is the guy I'm hiring to inspect the thing when I get home.  Now, were the airplane in my home district and the mechanic someone I planned to employ, then yes, the most thorough inspection/annual my pathetic bank account can buy.  Other than that, a look see to make certain there are no show stoppers. All I've ever wanted.  I spent a day with a mechanic on mine.  Couldn't find anything wrong. I was good with it.  No big surprises in a half dozen years.

All that said, I could go to a different mechanic and have the airplane declared unairworthy with 30 AMUs worth of discrepancies.  That's why I don't go to a different mechanic.

No way you buy a 50 year old airplane without some risk.  No shop, mechanic, or magic spell will eliminate that risk.  To think otherwise is pure foolishness.

Guy buys a Mooney relying on an annual by the sellers mechanic. Seems the mechanic missed(?) an undocumented but arguably obvious spit and bubblegum repair of a gear up. The problems (it was not the only one) were discovered in the course of later ordinary maintenance by the buyer's mechanic. Resulted in the grounding of the airplane until repaired and a (fortunately) brief FAA investigation into the buyer for flying an unairworthy aircraft. The scenario is fortunately rare but messy when it happens.

[Wistarmo]

So here's how it works for me.  I am only going to buy an airplane that I have seen and flown and know it's in good shape.  The sales contract lists a sale price and a deposit; once signed I put a serious deposit of $10,000 into escrow dependent on the annual inspection.  If the buyer is confident in his airplane, he will know that it should easily pass annual and a few squawks may come up.  At that point, I know he believes he has a good plane, one that is not going to eat up the deposit money.  Once the annual is done, there are the airworthy and non-airworthy items.  We discuss those and agree to negotiate any major non-airworthy ones; if he does not wish to do so, then I call off the deal and he gets a free annual.  If he agrees to fix the airworthy ones, I release the deposit and it becomes non-refundable.  At that point, he knows I am serious about the purchase, otherwise he can walk away with a free annual and the $10,000 deposit. He knows I am not going to derail the deal with steep or ridiculous demands; the risk is all mine.  The remaining money due to the seller goes into escrow. Then we usually haggle over a few items and he reduces the price a little.   Basically the price negotiation occurs well into the deal, when closure is in sight, the money is waiting to be transferred, and after the airplane has been thoroughly inspected.  We are not bargaining over unknowns at the beginning of the whole process when those decisions can be emotional.  It is a lot easier to negotiate a fair price with a concrete list of discrepancies than simply to offer a lower price based on appearance.  At this point the seller is motivated to close the deal.  I have never had a problem with this.     

[jaylw314]

15 hours ago, Wistarmo said:

So here's how it works for me.  I am only going to buy an airplane that I have seen and flown and know it's in good shape.  The sales contract lists a sale price and a deposit; once signed I put a serious deposit of $10,000 into escrow dependent on the annual inspection.  If the buyer is confident in his airplane, he will know that it should easily pass annual and a few squawks may come up.  At that point, I know he believes he has a good plane, one that is not going to eat up the deposit money.  Once the annual is done, there are the airworthy and non-airworthy items.  We discuss those and agree to negotiate any major non-airworthy ones; if he does not wish to do so, then I call off the deal and he gets a free annual.  If he agrees to fix the airworthy ones, I release the deposit and it becomes non-refundable.  At that point, he knows I am serious about the purchase, otherwise he can walk away with a free annual and the $10,000 deposit. He knows I am not going to derail the deal with steep or ridiculous demands; the risk is all mine.  The remaining money due to the seller goes into escrow. Then we usually haggle over a few items and he reduces the price a little.   Basically the price negotiation occurs well into the deal, when closure is in sight, the money is waiting to be transferred, and after the airplane has been thoroughly inspected.  We are not bargaining over unknowns at the beginning of the whole process when those decisions can be emotional.  It is a lot easier to negotiate a fair price with a concrete list of discrepancies than simply to offer a lower price based on appearance.  At this point the seller is motivated to close the deal.  I have never had a problem with this.     

That's pretty generous!  Most sales contract allow you to specify an "earnest money" amount, which the seller keeps if the buyer walks away.  I've never seen a standard amount like the 1-2% in most home sales contracts, but that's probably a more fair place to start. $10k is pretty darn large in comparison (assuming you're not buying a $500k plane), so I'd take that offer!  I'm assuming, of course, that you're not looking to buy another M20J  

A "deposit", on the other hand, is usually a demonstration by the buyer that he actually has the Benjamins to complete the sale.  It's either used as a way to prove you can get the purchase financed, or in cash purchases as a way of saying "hey, look at me, I can produce 10-20% the value of the sale just like that, so you know I'll be good for the rest."  It's usually refundable to the buyer if either party backs out.

I used Aerospace Reports for the escrow and title service.  I found them to be very helpful with information, communication and peace of mind for a very reasonable price.

[FlyingCanuck]

17 hours ago, Wistarmo said:

So here's how it works for me.  I am only going to buy an airplane that I have seen and flown and know it's in good shape.  The sales contract lists a sale price and a deposit; once signed I put a serious deposit of $10,000 into escrow dependent on the annual inspection.  If the buyer is confident in his airplane, he will know that it should easily pass annual and a few squawks may come up.  At that point, I know he believes he has a good plane, one that is not going to eat up the deposit money.  Once the annual is done, there are the airworthy and non-airworthy items.  We discuss those and agree to negotiate any major non-airworthy ones; if he does not wish to do so, then I call off the deal and he gets a free annual.  If he agrees to fix the airworthy ones, I release the deposit and it becomes non-refundable.  At that point, he knows I am serious about the purchase, otherwise he can walk away with a free annual and the $10,000 deposit. He knows I am not going to derail the deal with steep or ridiculous demands; the risk is all mine.  The remaining money due to the seller goes into escrow. Then we usually haggle over a few items and he reduces the price a little.   Basically the price negotiation occurs well into the deal, when closure is in sight, the money is waiting to be transferred, and after the airplane has been thoroughly inspected.  We are not bargaining over unknowns at the beginning of the whole process when those decisions can be emotional.  It is a lot easier to negotiate a fair price with a concrete list of discrepancies than simply to offer a lower price based on appearance.  At this point the seller is motivated to close the deal.  I have never had a problem with this.     

It's interesting that you report having success with continuing the price negotiation well into the process. You mentioned "The remaining money due to the seller goes into escrow. Then we usually haggle over a few items and he reduces the price a little.   Basically the price negotiation occurs well into the deal, when closure is in sight, the money is waiting to be transferred, and after the airplane has been thoroughly inspected."

Other MS'ers on here have suggested that's crazy - no way to change the price after a pre-buy eval is done. (In this thread, just scroll up )

Sounds like both approaches have worked?

[midlifeflyer]

2 hours ago, FlyingCanuck said:

It's interesting that you report having success with continuing the price negotiation well into the process. You mentioned "The remaining money due to the seller goes into escrow. Then we usually haggle over a few items and he reduces the price a little.   Basically the price negotiation occurs well into the deal, when closure is in sight, the money is waiting to be transferred, and after the airplane has been thoroughly inspected."

Other MS'ers on here have suggested that's crazy - no way to change the price after a pre-buy eval is done. (In this thread, just scroll up )

Sounds like both approaches have worked?

Depends on (a) what the purchase contract says, and (b) the seller's willingness to negotiate further.

[RobertGary1]

2 hours ago, midlifeflyer said:

Depends on (a) what the purchase contract says, and (b) the seller's willingness to negotiate further.

But you can appreciate how that could go. If the seller says there is small tear in the seat that's $500, a crank in interior plastic, $500, etc. Its a 50 year old plane, its not off the assembly line. Seems disingenuous. Now maybe if a non-airworthiness item is very big like a tank seal required soon but still airworthy I could see that.

 

-Robert

[Andy95W]

6 minutes ago, RobertGary1 said:

. If the seller says there is small tear in the seat that's $500, 

 

Buyer:  "There’s a tear in the seat, I’d like you to take $500 off the price.”

Me:  ”No.”

[midlifeflyer]

2 hours ago, Andy95W said:

Buyer:  "There’s a tear in the seat, I’d like you to take $500 off the price.”

Me:  ”No.”

I like than answer. 

[midlifeflyer]

2 hours ago, RobertGary1 said:

But you can appreciate how that could go. If the seller says there is small tear in the seat that's $500, a crank in interior plastic, $500, etc. Its a 50 year old plane, its not off the assembly line. Seems disingenuous. Now maybe if a non-airworthiness item is very big like a tank seal required soon but still airworthy I could see that.

 

-Robert

Doesn't change my comment. Whether that tactic works or blows up in the buyer's face depends  on (a) what the purchase contract says, and (b) the seller's willingness to negotiate further. 

[RobertGary1]

2 hours ago, Andy95W said:

Buyer:  "There’s a tear in the seat, I’d like you to take $500 off the price.”

Me:  ”No.”

Me: “why did you waste my time if you never intended to pay the agreed price”! 

[steingar]

Looking to bring in a partner to my ship.  Told him the squawks I know about, mainly the clock is out and the pity static is overdue.  Probably an AMU worth.  I need neither since I'm a VFR pilot. I did encourage him to have a pretty inspection done before he signs the dotted line.  I would.  If squawks came out of that they come out of my pocket.  Fair is fair.

[McMooney]

That reminds me. Where can i get my original clock fixed. The wind up clock in the yoke 

[carusoam]

Mcm 

have a look here...

There is a whole bunch of clock advice in the thread...

-a-

 

[1980Mooney]

Why would any owner deliver a plane and logs to a buyer-friendly A&P at a distant airport for pre-buy "annual"?  A PPI makes obvious sense - it's only an inspection and an "opinion".... You can take it or leave it.  You can fly your plane back to your home base.

But you have "Buyers" here saying the pre-buy annual turned up 10-25 Airworthiness Issues in some cases.  Let's say the Buyer's A&P claims an "non-airworthiness" corrosion issue.  It may not be black and white - the extent or seriousness may be subject to debate by reputable A&P's.  And the technique, extent and cost of the claimed "required repair" by the Buyer may also may be subject to debate by informed and reasonable parties.  

But you are not there to put your eyes and hands on it and neither is your A&P.  If you disagree with the diagnosis, prognosis and/or demanded cost to repair then the deal is likely off.   The buyer-friendly A&P buttons the plane up per the terms suggested by some above.  And as required the A&P writes up your logs with the "annual" noting that the plane has non-airworthiness issues that were not repaired.

Now you have a plane that is Not Airworthy at a distant airport.  Your insurance is void and you will need a ferry permit to get it back.

Brilliant negotiating position. I am sure it worked out well for the "Buyers" as noted above.  Even if you do cave and agree to repairs you have no control over cost.

If I were selling, the Buyer could conduct an "annual" on "his plane" once he owns it.  If he wants to save money and combine the PPI with the Annual then the Buyer needs to agree to terms, buy and transfer title while the plane is apart with his "buyer-friendly" A&P.  The Buyer can then pay for any repairs that he really thinks make economic sense.

[Jerry Pressley]

In all cases I have been involved with just a copy of relevant logs go to the mechanic for use during the inspection.  No log books are involved until inspection is complete and plane is purchased

[jaylw314]

3 hours ago, Jerry Pressley said:

In all cases I have been involved with just a copy of relevant logs go to the mechanic for use during the inspection.  No log books are involved until inspection is complete and plane is purchased

Holy cow, yes, any transfer of the actual logbooks before the purchase is completed is crazy.  If someone insists on the paper copies for a PPI, or even an annual, I'd tell them to go take a hike.  IIRC, some have suggested those paper logs can be worth 30% of the plane's value, and it raises the spectre of an unscrupulous mechanic holding your logs hostage.

[RobertGary1]

16 minutes ago, jaylw314 said:

Holy cow, yes, any transfer of the actual logbooks before the purchase is completed is crazy.  If someone insists on the paper copies for a PPI, or even an annual, I'd tell them to go take a hike.  IIRC, some have suggested those paper logs can be worth 30% of the plane's value, and it raises the spectre of an unscrupulous mechanic holding your logs hostage.

Send them a quote from the copy shop to make paper copies. 

-Robert 

[midlifeflyer]

5 hours ago, 1980Mooney said:

Why would any owner deliver a plane and logs to a buyer-friendly A&P at a distant airport for pre-buy "annual"?  A PPI makes obvious sense - it's only an inspection and an "opinion".... You can take it or leave it.  You can fly your plane back to your home base.

I've seen the issue covered in purchase contracts in multiple ways, including requiring that the PPI take place at the seller's location. And, if the PPI takes place at buyer's location and a PPI is not supposed to be an annual, an airworthiness issue might be uncovered. Logged or not, it presents a potential  problem  for the seller.

[Guest]

5 hours ago, jaylw314 said:

Holy cow, yes, any transfer of the actual logbooks before the purchase is completed is crazy.  If someone insists on the paper copies for a PPI, or even an annual, I'd tell them to go take a hike.  IIRC, some have suggested those paper logs can be worth 30% of the plane's value, and it raises the spectre of an unscrupulous mechanic holding your logs hostage.

It’s part of the maintainer training, screw all owners at every opportunity, hold their log books hostage until they agree to pay more, if they refuse, conveniently “lose“ the logs.

Clarence

 

[MikeOH]

4 hours ago, midlifeflyer said:

...not supposed to be an annual, an airworthiness issue might be uncovered. Logged or not, it presents a potential  problem  for the seller.

Hmm, I can understand the issue if an annual is started, but your comment prompts me to ask for some clarification:  Namely, what difference does it make if there is an annual going on?  Seems to me that if the mechanic spots an airworthiness issue and brings it to the seller's attention, doesn't that amount to the same problem for the seller?

[midlifeflyer]

2 minutes ago, MikeOH said:

Hmm, I can understand the issue if an annual is started, but your comment prompts me to ask for some clarification:  Namely, what difference does it make if there is an annual going on?  Seems to me that if the mechanic spots an airworthiness issue and brings it to the seller's attention, doesn't that amount to the same problem for the seller?

Yes. That is exactly what I meant. I guess it did need clarification