First time buyer. Help/Prebuy?

[Globemaster]

Hello everyone, I'm attempting to buy my first airplane, an 18-150 and I'm currently trying to navigate the best route to complete the purchase.

Clearly I need to get a prebuy done, but I'm having trouble finding someone to do it. The aircraft is located in southern Texas between San Antonio and Del Rio. Does anyone know any good places to find a mechanic who knows cubs well in this area?

I'm also trying to decide if I really need escrow services? Everywhere I look companies are offering escrow but is it really necessary? What are the benefits associated with it?

I also need to put together a purchase agreement that lays out the contingencies on things like a good prebuy being done and what to do if something looks bad.

I've made an offer to the seller contingent on a fresh annual and a good pre buy from a third party and the seller has agreed but nothing is in writing yet. I want to move on getting everything in line and done ASAP. my goal is take the cub to Airventure this year and it's going in for it's annual this week.

Lastly, any other advice? I'm in my late 20's and this is by far the largest purchase I've ever made, and while I know a thing or two about maintenance from working on heavy jets in the Air Force I'm definitely not savvy on small aircraft maintenance so that's of course my biggest concern. I'm planning to start watching Steve's videos on youtube about inspecting the cub so I have some more ideas of what to look for before and during ownership.

If the buy goes well I look forward to bringing it to OSH this year and meeting some other cub owners!

Thanks all!

 

[Amy]

Congrats on your airplane search!

Escrow services aren't required but often make things easier for you, and offer protections for both the buyer and seller. They are a neutral third party holding funds so the seller can't take the money and run, and you can't hose the seller either. The biggest benefit for most buyers is the title search to verify there are no liens on record. Sometimes with private party sales, these don't get cleaned up even decades past. They will also make sure you have all of the FAA paperwork completed and submitted; it's not difficult but it's nice to have it outlined. How much value it brings to you will usually depend upon what you want; you can also order a title search on its own. I work as an aircraft broker and we always use an escrow company but when I bought my Cub my bank ran the title search and handled the funds, so I did not use escrow in that situation. Most escrow companies are pretty similar as far as services provided but I usually work with Aerospace Reports.

AOPA has a purchase agreement template that is pretty standard throughout the piston market. It's a good starting point. You can check it out here: https://www.aopa.org/-/media/Files/...e-Aircraft-PurchaseSales-Agreement2018-01.pdf A good purchase agreement is simple to understand, and again protects both buyer and seller while outlining what each party needs to do.

If you want to walk through the process over the phone, please feel free to give a call at 651-414-6839 and I'm happy to walk through the basic steps of the process and where some risks may lie. It's an exciting process but the first time is always a learning experience! Good luck and hope to see your Cub at OSH (and better yet, head to New Holstein for the SuperCub.org gathering )

--Amy

 

[akskibum]

What exactly is a pre buy? Pay for an annual inspection without the maintenance part. If the inspection is good you can do the maintenance and have the annual done. As a seller, I'm not signing anything.

 

[DavePA11]

Finding out where the plane had its last annual and speaking to the mechanic may help. That way you have an idea of the condition of the plane at the time of the last annual.

Will you need an aircraft loan? The banks may require you to use an escrow service too. I used an escrow service when I purchased my current plane, and the seller seemed to like the idea funds were transferred from the escrow service. There are some protections for the buyer as Amy mentioned. Banks will require P&S agreement that the seller has to sign, but they can be very generic covering obvious pieces of information such as make, model, N-number, price, etc...

The first two planes I purchase I knew the mechanics so didn't need an extensive pre-buy. The most recent plane I bought was maintained by a good mechanic, and I gave him a call and he was willing to provide some information which helped determine the condition from last annual. Always good to get a Cub mechanic to check it out so you know what you are buying and what needs to be fixed since last annual.

Outside the condition of the aircraft, does the Cub have the required avionics that all work? Does it have ADS-B updates? Updating avionics in a certified aircraft can be very expensive. My next plane will be experimental so I can update avionics without having to sell my house.

 

[OLDCROWE]

Hello everyone, I'm attempting to buy my first airplane, an 18-150 and I'm currently trying to navigate the best route to complete the purchase.

Clearly I need to get a prebuy done, but I'm having trouble finding someone to do it. The aircraft is located in southern Texas between San Antonio and Del Rio. Does anyone know any good places to find a mechanic who knows cubs well in this area?

I'm also trying to decide if I really need escrow services? Everywhere I look companies are offering escrow but is it really necessary? What are the benefits associated with it?

I also need to put together a purchase agreement that lays out the contingencies on things like a good prebuy being done and what to do if something looks bad.

I've made an offer to the seller contingent on a fresh annual and a good pre buy from a third party and the seller has agreed but nothing is in writing yet. I want to move on getting everything in line and done ASAP. my goal is take the cub to Airventure this year and it's going in for it's annual this week.

Lastly, any other advice? I'm in my late 20's and this is by far the largest purchase I've ever made, and while I know a thing or two about maintenance from working on heavy jets in the Air Force I'm definitely not savvy on small aircraft maintenance so that's of course my biggest concern. I'm planning to start watching Steve's videos on youtube about inspecting the cub so I have some more ideas of what to look for before and during ownership.

If the buy goes well I look forward to bringing it to OSH this year and meeting some other cub owners!

Thanks all!

There's no better videos to watch than Steve's but he's also not that far away...

 

[RedOwlAirfield]

What exactly is a pre buy? Pay for an annual inspection without the maintenance part. If the inspection is good you can do the maintenance and have the annual done. As a seller, I'm not signing anything.

I have to agree! If as a seller I have a good product at a fair price, I'm not doing jack to help a buyer protect themselves. You want it, buy it. You don't, don't. Somebody else will. Super simple from the seller's perspective. I've sold a few planes and seen a lot more sold, and never saw a seller sign anything - other than a Bill of Sale.

I'm not trying to be harsh about it but I wouldn't sign a document created by lawyers and presented by the other party in a potential aircraft purchase under any circumstance. That's a huge warning flag to me. I could get MY lawyer to review the document, but why? The seller doesn't have any upside to signing the thing. To be honest, a lot of us would avoid doing business with someone who appears to be "looking for trouble."

I would also add that lots of folks in South Texas will not react charitably to being asked to sign something like this. That's still one part of the country where folks take their honor seriously and even though you're obviously an outsider, you're doing business (AKA "bidness") in South Texas.

Of course that's just my opinion. I could be wrong.

 

[1934A]

What RedOwl said...
Don't make it more complicated than it needs to be. Inspect the plane thoroughly, if it checks out, buy it. That simple.

 

[Globemaster]

What RedOwl said...
Don't make it more complicated than it needs to be. Inspect the plane thoroughly, if it checks out, buy it. That simple.

Unfortunately the loan agency is requiring me to have an A&P sign off a pre buy before they will transfer.

 

[DavePA11]

Unfortunately the loan agency is requiring me to have an A&P sign off a pre buy before they will transfer.

Globemaster - I used the P&S agreement Amy posted from AOPA. I might have removed some sections not relevant to the purchase I was making to keep it simple. Bank for loan also required this document. I didn't need a pre-buy, only past annual summary from log books. However, I believe it depends on the year it was built? Amy might know details.

 

[akskibum]

Unfortunately the loan agency is requiring me to have an A&P sign off a pre buy before they will transfer.

How do they define a pre buy? There really is no such thing. My definition might quite different than theirs.

 

[JWE]

Have a prebuy done by a mechanic who a.) knows Cubs and b.) is not the mechanic who has been maintaining the airplane.

 

[Paul Heinrich]

“My word is oak.” If the seller won’t sign a purchase agreement he is either ... or ....!

Trust doesn’t buy you much nowadays. I got robbed by a guy in Texas because I trusted his word. It only cost me $500, but the lesson was invaluable.

Run from a seller who won’t put the purchase agreement in writing.

 

[DavePA11]

“My word is oak.” If the seller won’t sign a purchase agreement he is either ... or ....!

Trust doesn’t buy you much nowadays. I got robbed by a guy in Texas because I trusted his word. It only cost me $500, but the lesson was invaluable.

Run from a seller who won’t put the purchase agreement in writing.

Paul - was the aircraft you were trying to buy "located in southern Texas between San Antonio and Del Rio." just to save Globemaster from potentially the same experience?

 

[Paul Heinrich]

No, it wasn’t. And I didn’t mean to suggest anyone in particular is dishonest, other than the person who robbed me and he just happened to be from Texas. The point is to get it in writing.

 

[dgapilot]

Unfortunately the loan agency is requiring me to have an A&P sign off a pre buy before they will transfer.

As an A&P, I would never sign off on a pre buy inspection. For starters, there is no such thing legally. The FAA only recognizes Annual Inspections, 100 hour inspections (both are the same except for who can sign it), and progressive inspections. Those are the only inspections I will sign for.

A pre buy inspection has no definition, so it can be as simple as riding a bicycle around the airplane, or as complex as complete disassembly of the entire airplane and engine, it is up to what is agreed between the buyer and seller. In the unusual case of me doing a “pre-buy”, all I will provide is a description of items I find that impact the cosmetic, structural, or system integrity. It is then up to the buyer and seller to negotiate the final price, or the seller may just walk away. No matter what, that pre buy has no legal bearing on the airworthiness of the airplane. That’s why when asked to do a pre buy, I will respond that I will do an annual inspection with a list of discrepancies and it is up to the buyer and seller to hash out who is responsible to fix the discrepancies.

As for a contract, the only thing I’ll ever sign when selling an airplane is the Bill of Sale, and in most cases, the only form of payment is CASH! If you want the airplane, negotiate a price and pay it, otherwise walk away. Once title passes it’s yours, don’t come back looking for and refunds or warranties. You buy an airplane as is where is unless you buy from a dealer that offers some type of Warrenty.


Sent from my iPad using Tapatalk

 

[DavePA11]

dgapilot - when buying an aircraft with some of it financed by a bank via an aircraft loan, the bank will require a simple P&S agreement as what Amy mentioned from AOPA. Its a rather simple document declaring your intentions to sell the aircraft with xx equipment and for yy amount to the buyer.

If a seller will not agree to P&S agreement then it reduces potential buyers who only have cash in the full amount. Its probably fine for the less expensive aircraft, but the higher priced ones its not uncommon for the buyer to take a loan. Escrow service is a safe way to obtain full payment via one bank transfer, and reduces risk of fraud from my experience. The escrow service takes funds from the buyer and from the bank lending the money, and then they provide the full amount to the seller in one transfer once Bill of Sale is signed. Cash in the form of a bank transfer to the seller via escrow service in my opinion is much better than a bank check or personal check especially when dealing above $100K. I agree the pre-buy is an annual where seller/buyer have to agree on who does it, who pays for it and how to handle outcome of the annual. I wouldn't let any mechanic touch my plane unless I knew them. The mechanics for tin-cans don't always know how to handle a fabric planes based on my experiences, and can do a lot of unintentional damage.

Wonder if Globemaster has it correct on the requirement for pre-buy inspection vs having requirement for P&S agreement in place? Maybe the pre-buy is just something he wants to have done by a mechanic?

Globemaster - AOPA offers services for aircraft loans, and they work with banks such as USAlliance FCU that uses USA Specialty Lending without requirements for "pre-buy" inspections. Might be worth looking into other loan options too if the requirements are too difficult to meet with current lender.

 

[behindpropellers]

A sales agreement protects both the buyer and the seller. Often times the purchase agreement is part of your escrow documentation. I would not buy from somebody that refuses an inspection and sale agreement. It's just part of doing business. You can blow through a lot of $$ if you purchase a plane with lots of issues.

 

[flynlow]

I have bought several airplanes with the agreement I would pay for the annual inspection and the seller would pay for any descrepancies. I want a airworthy airplane before I spend money … not sure what a airplane is worth that ya can’t fly


Sent from my iPhone using SuperCub.Org

 

[Amy]

Globemaster, the comments you are seeing regarding the definition of a prebuy are all spot-on. It means different things to different people and leaves a lot of room for interpretation. It’s why the recommendation is doing an annual inspection, because it has a defined scope. If a customer approaches us to do a prebuy and it’s NOT an annual, they are responsible for thoroughly defining the scope, because the risk is that the buyer ends up mad at us because we only checked within the requested scope and didn’t do something else. I’m having this conversation with a first-time buyer as he wants a reduced scope inspection based on “the annual was done by a good shop.” It’s tough to be patient sometimes when it seems like there is a fast way forward (and the single engine piston market is moving quickly right now) but making an educated decision will make your ownership experience much happier.

As for documentation for financing, my lender had a lengthy form to fill out with photo requirements too. It’s been a while, but I think it was technically supposed to be signed off by an A&P or IA for the bank records (nothing airworthiness related) but they knew me and my background so they were fine with me completing it. Your mileage may vary depending upon your bank and the dollar value financed.

If a shop has a prior relationship with an airplane, they are generally not the ideal choice to do any form of inspection because they likely want to keep a good relationship with the seller.

Every airplane can surprise you even when you think you’ve done everything right and been practical, but you can minimize the risk while being fair to all parties. And never forget, you think a good mechanic is expensive until you hire a cheap one!

—Amy


Sent from my iPhone using Tapatalk

 

[Steve Pierce]

I would not buy a Super Cub without it being checked out by a mechanic knowledgeable of type. To many pitfalls that can cost you a lot of money. I wrote an article about it that you can read here. https://docs.google.com/document/d/15H0D07cK6H61Lf_1k3NVgf8jnUHFwK4R94uVTS7mOoY/edit?usp=sharing
Over the years I have seen way to many things not done, not done correctly and pure fraud. All cost the new owner a lot of money. I do not look at an airplane until I review the paperwork. You can weed out a lot of airplanes that way. Sometimes when asking questions about the airplane the owner has flat out told me this is not one I want to look at. Anyway, read the article, it explains my process and start reading this website to educate yourself. Also become a paying member.

 

[dgapilot]

DavePA11, yeah, I know lots of banks want paperwork. The last airplane I purchased that had a bank loan was back in 1996. No sales agreement was signed, but the bank used an escrow company that held the funds until the BOS and application for registration were filed with FAA. That airplane had lots of paperwork issues and it took about a year to get all of them corrected. Lots of major alterations with no 337s. Fortunately for me, I could work them all out. There are advantages to being an IA and an aircraft owner. At the time it was also a lot easier to get field approvals for stuff. Not like today where most FAA inspectors are afraid to put their name in block 3 of the 337.

Every other airplane I’ve purchased was for cash. I’ve known people that have traveled across the country with over $100k in cash to buy airplanes. I’ve known lots of sellers that will only accept cash as payment. With the changing tax code, I suspect we will be seeing a lot more cash only transactions. People are changing the way they do business and how they manage their assets. I’m all for running a cash based society and getting away from the credit nightmare that America has become.


Sent from my iPad using Tapatalk

 

[BTV]

If the plane was recently recovered and is now in San Angelo don’t waste your time. I’ve looked at it. PM me if you want details

 

[Kodiakmack]

I'm with Steve on looking over paperwork before even considering an airplane. I paid what I did for my -12 because it had the best paperwork I had seen. If you can find a mechanic who has digital access to the FAA's airworthiness/registration history files this speeds things up big time. I learned A LOT during my search for an airplane by learning to sleuth through these files. It's fun too.

Good luck! Don't fall in love and get in a rush. Take your time and get what you want.

 

[Paul Jackson]

I am in the business as a broker and acquisitions for others. I will not purchase an aircraft without a Purchase Agreement in place and escrow or the equivalent.

Purchase Agreement. It defines what you are buying and what the process of inspection and the process of the transaction. As said above, it protects both sides. Usually you agree on a price and what is included verbally and the PA is drawn up and signed and the deposit is sent to escrow. Escrow will verify that both parties have signed the PA and that the deposit has hit the account. The next step is the inspection. My PA's usually define 3 inspections, a visual (to include logs), a mechanical (PPI) to be conducted by an A&P with protections that all costs of the inspection are to be on the buyer (the scope of the inspection is between the buyer and the mechanic and you need to clear that well before you are at this point), and a test flight by an approved pilot by both parties (could be seller). Your mechanic will give you a squawk list of items post PPI that you can present to the seller. You present this list to the seller and they can review it over a set period of time (usually 3 business days) and answer each squawk with three options:

This will be repaired at seller's expense prior to closing
I offer you $XXX to accept the squawk
I decline to repair the squawk

The buyer reviews the answers and per the PA if agreement can't be made the purchaser can walk and his deposit is refunded as the aircraft failed inspection and no remedy was offered. If I were the seller I would insist that the PA only allow this option if the item in dispute is an airworthiness item but that should be decided prior to the PA being signed and entered into. If a test flight were defined in the PA post PPI and after fixes are made comes the defined test flight to demonstrate the aircraft and the last chance to catch any items that were squawked are actually remedied and that the aircraft is in proper operating condition. On pistons I usually request a flight of no more than an hour. On business jets I request up to two hours (need to get to the flight levels and back down) and expenses for the flight are on the buyer. Post test flight the deposit is now non-refundable in most PA's.

If the inspections are deemed completed the aircraft can proceed to delivery. Delivery will be to either to the buyer or their designated representative at the designated location in the PA. I usually include a delivery receipt in the PA so a ferry pilot can check off the equipment that was in the PA and also verify that the logs and any other items like covers and loose equipment is there. Even if it is the buyer doing the pick up, it is a good idea to slow down and make sure everything in the PA is there as expected. With that the delivery receipt is scanned and sent to escrow and closing can occur.

The escrow agent should have already had a Bill of Sale completed and held and also a registration application from the buyer in hand. If there is a lien the agent will get the exact amount and pre-permission that if paid the bank will release lien. The seller will get a disbursement notice so that they can see exactly how much they and other parties are to be paid at closing. This is a great for the seller as they know and can dispute before liens are released and titles are transferred.

Closing can be as formal as a conference call or it can be as informal as via prior email permission (when funds hit in the proper amount you have my permission to release title). The closing is the release of funds from the buyer and release of title by the seller. If there is a lien on the aircraft the escrow agent will contact the third party to ask permission to release the lien as funds are in hand for to satisfy the lien. The agent will then go to the FAA registration desk (they are in the same building) and register the aircraft and remove the FAA lien on the aircraft. The agent will verify wire of funds to the respective bank accounts has occurred and funds have hit with the respective parties. The agent will also verify registration and provide a "fly wire" temp registration document for the buyer to move the aircraft.

Post closing the aircraft is defacto registered to the buyer. The buyer has assurance that any liens held are cleared and they have taken delivery of exactly what they were buying. The seller is assured that the aircraft is in fact out of their name and that any loans in their name are satisfied prior to releasing title.

The last key item is to make sure insurance is aware of the process and the aircraft is covered by the seller until closing and immediately on closing by the buyer.

Several on here have said they won't sign anything as a seller and that is there prerogative. I tell any customer of mine that it doesn't matter if it is a J3 (simple agreement) or a GV (last one was 29 pages) it needs to have a Purchase Agreement. I bought and sold both last year and PA's covered my customer's interests and I was paid for my guidance and oversight. I could list several nightmare scenarios and situations I have seen but that isn't the point here. Buying an aircraft is likely the largest transaction a person will make next to their house. I can't see any reason that the process can't be laid out for both parties via contract and followed to protect both sides from risk and malfeasance.

Good luck and I offer free advice as part of the job.

 

[flynlow]

If the plane was recently recovered and is now in San Angelo don’t waste your time. I’ve looked at it. PM me if you want details

Check your PMs


Sent from my iPhone using SuperCub.Org mobile app

 

[DENNY]

Sounds like you are already a ways down the road but my advice is to always find a IA before you ever look at any plane. Seen way too many cases when the pre buy or annual was OK only to have the plane brought to a local IA who thinks it needs several thousand dollars worth of work/parts. Don't be in a hurry to buy just to make it to a fly in. Never fall in love or even flirt with a plane until the IA approves of the relationship. DENNY