Making an Offer and Using Escrow

The prebuy told you what the airplane is. This step turns that into a number, and then moves the money safely. Both halves are more mechanical than they look, and both are places where first-time buyers give away money they did not need to.

Start from what it is worth, not what it is listed at

An asking price is a seller's opinion. It is a reasonable starting point and a poor anchor, because it was set before anyone inspected the airplane and it usually assumes condition the prebuy has now either confirmed or contradicted.

The useful question is not "how much can I talk them down" but "what is this specific airframe worth, and does the asking price reflect it". Those are different negotiations. The first is haggling. The second is an argument backed by findings, and it is far more likely to work, because a seller can check it.

Turning prebuy findings into a number

Not every finding is worth the same. Ordered roughly by how much they move value:

• Missing or reconstructed logbooks are the worst case. Nothing else on this list is as damaging. Records are how every other claim about the airplane gets verified, and without them a buyer has to assume the worst — so the market does exactly that.
• Engine time against TBO is the single biggest routine swing. An engine is a five-figure consumable with a known life. Value moves roughly in proportion to how much of that life is left — a fresh overhaul is worth real money over a mid-time engine, and a run-out one is worth substantially less, whatever the rest of the airplane looks like.
• Structural damage is severe, and it fades slowly. A repair to primary structure carries a large discount that shrinks with time and hours but never fully disappears.
• Cosmetic damage barely moves value. Hangar rash and small dents are close to noise. Paint and interior matter to how fast it sells more than to what it is worth.
• Repeated incidents compound rather than add. Two separate events are worse than the sum of the two discounts, because a pattern says something a single event does not.

Two practical notes. Disclosed damage is not the same as hidden damage — a documented, properly repaired incident is a known quantity and prices accordingly, which is why the history check matters more than the rumour. And an adjustment has to be arguable. A number you can explain, tied to a finding and to what the fix costs, moves a seller. A round number you cannot justify reads as a lowball and hardens the negotiation.

The three ways a finding gets settled

Step 6 introduced these; the choice between them is the negotiation.

• A price reduction — cleanest, and it puts the risk and the work on you.
• A seller-funded repair before closing — good when the fix is specialised, but agree in writing who chooses the shop and what "complete" means.
• A credit at closing — useful when the repair can wait, and it avoids arguing about workmanship.

Price reductions are simplest and the least likely to go wrong. Seller-funded repairs are where deals stall, because two people who have agreed on a dollar figure discover they have not agreed on a standard.

What actually goes in the offer

A written purchase agreement, a deposit, and — the clause that matters — a prebuy contingency. That contingency is what makes the deposit refundable if the inspection turns up something you are unwilling to accept, and it should say plainly who pays for the inspection, what timeframe you have, and on what basis you can walk.

An offer without that contingency is not a bargain, it is an unpriced risk.

Why escrow exists

At closing, two things have to happen: your money goes to the seller, and the airplane's title comes to you. Whoever moves first is exposed. Escrow removes that problem — a neutral third party holds the funds and the signed documents and releases both at the same moment, once the conditions everyone agreed to are met.

For a purchase of this size, that is not excessive caution. It is the normal way it is done.

Aircraft escrow is its own specialism, and it lives in Oklahoma City

This is the part that looks strange until you know why. The FAA maintains a single national registry of civil aircraft, and it is in Oklahoma City. Title work means searching and filing at that registry — so the firms that do this work cluster in and around that one city. It is not a coincidence and it is not a gimmick.

Use a firm that does aircraft specifically. A general real-estate escrow company is not set up to search the FAA registry or file with it, and that searching is most of the value you are paying for.

What a title search actually searches

It searches the FAA registry for interests recorded against that airframe — ownership, and crucially any security instruments, which is the formal term for liens. Recording is statutory, and the point a buyer needs to understand is this:

A recorded lien attaches to the aircraft, not to the person who borrowed the money. An unreleased lien follows the airplane to you. Discharging it has to be filed, not merely promised in a conversation, and confirming that filing happened is part of what the escrow agent is for.

What to ask before you wire anything

• Is the fee schedule in writing? Ask up front. We deliberately do not publish a typical figure, because we have not verified one we would stand behind.
• What exactly does the title search cover — ownership only, or liens and encumbrances as well?
• What are the release conditions, in writing, in plain language?
• Who confirms the lien release is filed, and how will you see proof?

Before you sign: who is actually buying this airplane?

Registration is made in the legal name of the owner, so this has to be settled before you sign — not after. Owning it personally is the simple case and needs no further thought.

If you are considering an LLC, co-ownership, or any business use, stop here and read the companion page below. The near-universal instinct — hold the airplane in an LLC for liability protection — produces, on its own, the one structure the FAA objects to, and it can void the insurance you are about to buy. Business use also starts a recordkeeping obligation on the day you close.

That is too much to compress into a section here, and it applies to some buyers and not others, so it has its own page: Owning through a business: structure, FAA rules and tax.