Pre-buy inspections sink aircraft sales. Five ways sellers get ahead

A personal or business aircraft purchase transaction is a carefully orchestrated operation integrating multiple components. After the buyer selects an aircraft that fulfills their criteria, financing and insurance professionals help move the transaction along. A pre-buy inspection is also a key component. This intensive analysis often uncovers a hornet's nest of problems that can potentially stop the transaction in its tracks. An astute owner focused on resale value (and a smoother purchase transaction) may partner with their maintenance services provider. Implementing five integrated tactics can increase the odds of a successful outcome.What damage history really meansAn aircraft's damage history carries a surprising misconception. For a given damage incident, the repair's cause (not the damage scope) determines whether the event should be included in the aircraft's damage history. A damage-related repair may be identical to one for a wear-and-tear issue. However, the latter repair would not qualify for damage history inclusion.Events applicable to an aircraft's damage history include landing gear stress, wingtip damage, wildlife strikes, and lightning strikes that can impact multiple components. Older, higher-hours aircraft are more likely to have incurred some level of damage history. The pre-buy inspector should review all types of damage and ensure proper repair completion. Equally importantly, they should determine whether unrepaired (or hidden) damage exists. For perspective, buyers often have reservations about an aircraft's damage history, even when new parts are integrated into the damage repair.Minor vs. major damageA minor damage incident typically does not decrease an aircraft's resale value. For instance, replacing screw- or bolt-attached parts isn't considered a resale value detractor. Exception: when a runway excursion has caused the repair. Important note: the market perception of "minor damage" varies widely depending on the aircraft type, buyer, and circumstances.A major damage event is an entirely different ball game. A runway excursion that requires a doubler-reinforced major structural repair, and that mandates additional inspections, can significantly impact the aircraft's value. Other examples of major damage include substantial corrosion or an incident that requires major structural repair. If a piece of ground support equipment pierces a pressure vessel, that also qualifies as a major damage event.Sellers should insist on obtaining copies of all damage-related documentation. Invoices, work orders, and photos are key components of each damage incident report. Unrepaired damage photos can also be useful. Early damage disclosure is key. Buyers should be made aware of aircraft damage early in their aircraft evaluation. They should also be given evidence of accurately documented repairs. Finally, the repair facility's reputation plays a role in the buyer's comfort with the damage repair resolution, according to aviation maintenance services firm Duncan Aviation.Other common pre-buy inspection problemsAn intensive pre-buy inspection often uncovers a host of maintenance-related problems. Although some issues pertain to non-functional systems and equipment, maintenance documentation discrepancies comprise much of the pre-buy inspection's findings.Non-functional cabin systems: Non-operational galley equipment, cabin entertainment systems, and window shade buttons might seem like relatively minor problems. However, these systems are included in the aircraft certification process. If the inspector uncovers relevant issues during the pre-buy inspection, the seller would likely be required to correct them. Obtaining near-obsolete system components can result in substantial added expense.Paper trail discrepancies: An aircraft that has undergone a modification or major repair should have a lengthy paper trail. This documentation includes multiple FAA-required documents such as the Instructions for Continued Airworthiness. The pre-buy inspector should verify the documents' presence and ensure they are integrated into all required inspections. Missing aircraft changes certification: A current or previous owner may have commissioned aircraft modifications, refurbishments, and/or upgrades. If a change was never certified, or the change does not meet approval standards, the issue must be addressed during the pre-buy inspection. Resolving this issue may require considerable time and expense.Potential inspection program transition: An aircraft's inspection program type depends on its current utilization and operator. If the aircraft's utilization is substantially higher or lower than the standard manufacturer's inspection protocol, the aircraft may need to be transitioned back to that baseline program. The buyer should be told about this often costly process, according to business aviation consultancy Van Allen Group.When records are missingIf an aircraft's maintenance records are incomplete or missing, the discrepancy can negatively impact a purchase transaction. Resolving the issue(s) can take considerable time and result in substantial expense.FAA compliance issues: The FAA requires complete aircraft maintenance and repair documentation. One or more missing logbooks means previous inspections and modifications cannot be verified. This issue can potentially affect FAA standards compliance and in some cases jeopardize the aircraft's legal airworthiness. That said, an aircraft is not automatically unairworthy because some historical records are missing.Unclear damage history: When an aircraft lacks a thorough maintenance history, buyers cannot ascertain whether the airplane has been significantly damaged or had major repairs. Lacking these key pieces of information, the aircraft is at higher risk of hidden structural problems and/or mechanical malfunctions.Decreased market valuation: An aircraft lacking complete records documentation will likely see a substantial decrease in its market value. To further complicate the issue, a potential buyer often views incomplete documentation as a red flag that could indicate other maintenance issues.Financing and insurance obstacles: Lenders generally require complete logbook documentation before approving a buyer's financing application. Incomplete records can limit the buyer's financing choices, and the available options may be more expensive. Insurers also want to see a complete set of logbooks. Without them, the buyer may find it challenging to obtain the desired amount of coverage, according to the Ogarajets aviation consulting firm. Moving toward a "win-win" transactionA well-maintained, accurately documented aircraft will likely undergo a smoother inspection. From an aircraft broker's perspective, these positives result in a more marketable commodity. Once a deal comes together, this aircraft has a better chance of a relatively uncomplicated closing transaction.The opposite is also true. An aircraft with incomplete required maintenance, and disorganized or incomplete logbooks, will likely face resale obstacles. Some potential buyers may simply walk away. If they move forward, stalled negotiations and undesirable price reductions could occur. To lessen the odds of the second outcome, sellers should consider implementing these five pre-listing strategies.Keep impeccable aircraft maintenance recordsToday's aircraft buyers are wary of incomplete, inaccurate, and/or doctored maintenance logbooks. Owners should ensure that the aircraft's airframe, engine, propeller, and other applicable logbooks are complete and accurately dated. Equally importantly, compliance with every airworthiness directive should be documented. Status sheets should correctly reflect inspection intervals, life-limited parts, and component times.Together, this maintenance documentation often means the aircraft has received its required maintenance and inspections. An aircraft with a clean maintenance history makes the buyer's due diligence easier, facilitating a smoother transaction.Ensure timely squawk resolutionWhen the pre-buy inspection uncovers a known (but unaddressed) squawk, the buyer may see an opening for a price concession or other accommodation. Conversely, a well-maintained aircraft with proactive squawk resolution means the buyer has fewer opportunities to gain leverage and potentially sidetrack the transaction. For the seller (often the pilot), smart squawk documentation can steer the troubleshooting process in the right direction, according to the Aircraft Owners and Pilots Association.Resolve glaring cosmetic issues When a buyer views an aircraft with a dated or worn interior, or with visibly fading paint, they may wonder if the airplane's maintenance reflects similar inattention. Although a complete refurbishment often isn't necessary, an aircraft that delivers a good first impression can encourage the buyer to keep moving forward.Strategically schedule key milestonesEvery aircraft must undergo specific required inspections. In certain cases, a complete engine overhaul may be appropriate. Depending on the aircraft's market demand, and the ideal buyer persona, two strategies are in play.A pre-listing inspection could make the aircraft more appealing to potential buyers. At the opposite end of the spectrum, a lower price for an aircraft with incomplete maintenance milestones could be the better strategy.Plan for the pre-buy inspectionThe pre-buy inspection often sets the stage for the transaction's tone. A seller with a cohesive inspection game plan can better address its findings, decrease unwelcome surprises, and effectively manage the transaction.Toward this goal, the seller should gain an understanding of the aircraft type's typical inspection findings. Viewing the aircraft's recent maintenance records with a reputable service partner, and identifying areas where buyers may request additional details, are also key planning components.None of this guarantees a sale. But when an aircraft's paperwork makes the heavy lifting look easy, the buyer's mindset shifts from defense to offense and that's how sales are made.