Buying process Help/Advice

[sandeepdutta]

Hello ,

We have decided to acquire a M20K , this will be our first aircraft purchase. We live in the Bay Area and are looking for advice / help in the buying process.

Some very basic questions . Do we engage with a buy agent ? if yes any recommendations. What kind of pre-buy contracts

are typical ? Can we make an "Annual" a pre-buy condition ?  Any / All other advice are welcome.

 

Best Regards

Sandeep

[Ragsf15e]

5 minutes ago, sandeepdutta said:

Hello ,

We have decided to acquire a M20K , this will be our first aircraft purchase. We live in the Bay Area and are looking for advice / help in the buying process.

Some very basic questions . Do we engage with a buy agent ? if yes any recommendations. What kind of pre-buy contracts

are typical ? Can we make an "Annual" a pre-buy condition ?  Any / All other advice are welcome.

 

Best Regards

Sandeep

An agent can help, especially with a first purchase.  Jimmy Garrison at GMax Aircraft is well respected within the Mooney community.  Especially for a first purchase, you might not know what you don’t know, so having an experienced person help isn’t a bad idea.  

[toto]

27 minutes ago, Ragsf15e said:

An agent can help, especially with a first purchase.  Jimmy Garrison at GMax Aircraft is well respected within the Mooney community.  Especially for a first purchase, you might not know what you don’t know, so having an experienced person help isn’t a bad idea.  

@jgarrison

[M20F]

Jimmy Garrison and that is from personal experience.  He is a man of his word. 

[Fly Boomer]

1 hour ago, sandeepdutta said:

Can we make an "Annual" a pre-buy condition ?

I wouldn't be too confident in an annual--especially if performed by the seller or a mechanic selected by the seller.  Some annual inspections are not worth the paper they are written on.  Normally, a seller will not agree to an annual inspection by your mechanic because it is too invasive, and it can reveal conditions that would have to be addressed to return the airplane to an airworthy condition.  Sometimes a buyer can have a mechanic of his choosing "examine" (not "inspect") the airplane prior to purchase with the understanding that, with additional (more invasive) activities, it can be converted into an annual "inspection" after purchase.

[Fritz1]

Learn as much as you can from reading for sale ads and logbooks, Jimmy Garrison is a good resource, contact Savvy, see what they have to offer, establish an upgrade and repair budget on top of the purchase price, on a 25 year old airplane this can be another 20% to 50% of the purchase price to be spent within 2 years, start looking for a hangar, enjoy the ride, the journey is the destination

[mhrivnak]

Using an agent is a reasonable idea for a first transaction. But roughly the process can ideally be:

1. Have someone knowledgeable look over the ad and scanned logs to help you affirm that the plane is a good fit for you and reasonably priced.
2. Make an offer along with a proposed contract, unless the seller has a contract. It should spell out the terms of getting an inspection done, who pays for what, how long you have to complete the purchase, whether you'll use an aviation escrow service (hint: it's a great idea), etc. AOPA has an example contract you can find.
3. Arrange a pre-buy inspection done by someone who knows Mooneys but hasn't worked on this one. It should start with a thorough and detailed log book review so you'll know what to look for during the physical inspection.
4. With the log review done, which might reveal some specific items to look at, someone will inspect the plane in-person. You want to pay them by the hour for as little or much time as you both agree it takes to be confident in a go/no-go decision. They'll look for the most-likely deal-breakers first and stop if they find a major concern, so you can evaluate whether to continue or walk away. At the end you want to receive a summary of condition and any problems or concerns that could be expensive or airworthy. You should also receive itemized estimates for any issues that must or should be fixed soon.
5. You'll negotiate with the seller over who will fix, or pay to fix, discrepancies.
6. The escrow service can handle all of the paperwork with the FAA and will disperse money. Or they'll return your money, and you hand the keys back to the seller.

In reality it can be difficult to schedule a pre-buy on short notice, but it's very worthwhile and the best money you'll spend. The best money I spent in my own purchase process was on a pre-buy for a plane I ended up walking away from, due to surprises revealed in the inspection process.

An annual determines if an airplane is airworthy (even if just barely) today, but says little about tomorrow or next year. You want something very different: guidance on whether you should assume ownership of the plane and all of its potential / developing problems. Nobody has a crystal ball, but they can give you surprisingly-specific advice about what expensive work will likely be required in the coming years.

Also keep in mind that once you start an annual, it must be completed. But with a pre-buy inspection, if the mechanic finds a deal-breaker in the first hour (airframe corrosion, metal in the oil filter, surprise damage history, ...), you can stop right there and call the whole thing off.

If it's convenient or efficient to also do an annual during the purchase process, go for it. You'll insist that it at least has a current annual. But personally, even if I was buying a plane whose annual expired real soon, I'd first pay someone to spend at least a few hours hands-on looking for deal-breakers before committing to a full annual.

My last bit of advice: know what you want, and be ready to move FAST because good planes get a lot of interest. Get on hangar waiting lists right now. Find an insurance agent you like. Pick an aviation escrow service. Start transition training now if you can find a CFI with a Mooney. You want everything lined up in advance and ready to go. When you see an ad of interest, respond right away, and be prepared to get on the phone almost immediately trying to find a shop in the area that can do a pre-buy.

[Pinecone]

A couple of things.

I used @jetdriven to review logs on the airplanes I was looking.  He found some deal killers on a couple of them.

If you are financing, get everything done before.  As in, have the loan approved with the max you can get.  When you find the right plane, you can pounce.  I was 10 days from first add to closing on the deal.

Have some money in the hands of a title/escrow service.  I used AeroSpace Reports. That way you can put a deposit on it quickly.

Due to having my ducks in a row, I was able to get the plane I have.  Any delays, and another buyer may have slid in. And there were others.

[exM20K]

100% agree with @Pinecone here. Be ready and able to execute. Lots of good advice in this thread for the due diligence part, but when you find the plane that will work, you need to show up with money, insurance, and a qualified CFI or ferry pilot.

I was where you are 30-ish years ago, living on the east coast and buying a 231 out of the Bay Area. Paul Loewen at Lake Aerostyling and Repair (now LASAR) in Lakeport, CA, did the pre-buy. Closed the transaction with AIC Title, who I’ve used probably 75-100 times as a dealer and for myself, flew out west with an airline friend / CFII, and had a grand adventure coming back.

Definitely connect with @jgarrison, Mark Woods, or Richard Simile.  They know the market, and whatever you spend for a buyer’s agent will be dwarfed by the off-market planes they may be able to show you or the disasters they keep you from.

Enjoy the adventure.

-dan

[Pinecone]

Jimmy or Richard may also be able to track down a plane that meets your needs.

Call and talk to them.

[AndreiC]

If you are in the Bay Area, Top Gun aviation at Stockton is a very good shop for Mooneys. They are very busy, but you may be able to get them to look at and give advice on the plane you're looking at. 

[201Mooniac]

11 hours ago, AndreiC said:

If you are in the Bay Area, Top Gun aviation at Stockton is a very good shop for Mooneys. They are very busy, but you may be able to get them to look at and give advice on the plane you're looking at. 

Also, Mark at Top Gun often knows customers who are considering selling their aircraft, you might talk to him about the pre-buy process and if he knows any aircraft that might come available.  

[Ed de C.]

When I decided to buy my first airplane a year ago, the first thing I did was sign up with SAVVY's free program to advise you how to make a purchase.  I believe they looked over the logs of the candidate and gave me a thumbs up (or down) at no charge.  They had advice on how to make an offer.  After I decided to make an offer and got that accepted, I signed up for SAVVY's pre-purchase inspection program ($750 I think).  This program helped arrange the pre-buy and disposition of findings and who should pay for what.  Once we got through the pre-buy and the plane became mine, I signed up with SAVVY's maintenance management program to continue the service.  

If you like the idea of some hand-holding through the process, check out SAVVY's website for yourself.  If you've done this several times, you don't need much outside help.  

My purchase was an import from Canada.  Luckily, I was buying from a seller's broker in Canada who was very familiar with the export process to the US, and we negotiated that he would do all that work (customs, getting US airworthiness, etc.)  Even then, I did a lot of research to figure out what had to happen.  Your situation is easier (a domestic purchase).  The nice thing about working with a broker of some sort is that you don't deal directly with the seller.  The broker screens both seller and buyer to make sure both are serious.  Of course, someone is paying for that benefit in the form of the broker's fee.  It worked well for me.  

As others have said, a call into Jimmy Garrison is well worth it.  I made such a call when I was thinking about buying an Acclaim.  He said, "So, if flying in the flight levels frequently is you, then go for it.  If that's not you, let me suggest you look at an Ovation.  If you ever want to sell, the market is 3x larger."  He knows things that you may not think about, and he's very easy to talk to.  If he had the right plane at the time, I would have bought from him.

Setting up an escrow account with one of the several firms out there is easy.  You call them and they tell you what to do and they handle it.  In my case, the selling broker gave me the contact info at an escrow company in Oklahoma which worked flawlessly.  They even knew the rules about import.  It'll be several hundred dollars depending on aircraft value (I think).

Ed