It always amazes me just how many people are caught out when they make the decision to sell their aircraft, but when you look at the array of specialists offering to support the sales process, it is hardly surprising.
It’s often said that in excess of 80%, as many as 85% perhaps, of all jet sales transactions involve an appointed broker, so my primary focus here is to help guide you through this selection process.
A professional broker should be a trustworthy and knowledgeable individual or organization with excellent industry relationships and history. Ideally, they should not have any “ownership” interest in the aircraft (unless they do actually own it) and should be willing and able to provide a wide range of support. The following list is by no means exhaustive but is a useful aide memoire when you are speaking with a prospective broker.
Firstly, are they a broker or an intermediary?
There are many individuals purporting to be brokers who are best termed as “intermediaries” and while these individuals fulfill a purpose, it’s important to realize that they are not the ones overseeing your transaction. In fact, they will then take your aircraft to their “partner,” a specialist aircraft broker, who will then manage the sale for them. However, they will have been squeezed on their fee and while such arrangements can work, you may have been better off paying all of your fee to the broker to focus his attention even more.
Ensure the broker is selling aircraft that they have inspected?
In fact, it’s the records that are perhaps more important, so make sure that they intend to review the facts rather than selling “blind.” When an aircraft is marketed without this thorough check being undertaken, the chances of the deal falling over is likely to be significantly higher. Equipment lists need to be verified, maintenance status fully understood, confirmation of no damage history or indeed understanding the repairs or replacements that were undertaken if there has been an incident, how good is the paint and interior, and so on. In my experience, many aircraft owners believe their aircraft to be the best one available, so it’s a good idea to have this independently verified.
How much support is the broker going to give your aircraft in what is a very overcrowded market?
Make sure that the advertising commitment is sufficient. There are many advertising portals available, but are they hitting page one of Google? A presence on their own website simply won’t be enough; they need to commit to pay for display on the likes of Controller.com and AVBuyer.com throughout the marketing process. Without this, your aircraft will be largely invisible to buyers.
Also, check to see whether they are planning to run print media adverts in the leading aircraft sales journals. These are still an important source of leads as prospective buyers peruse such magazines in FBOs or on board their aircraft.
Are they innovative?
Increasingly, social media is a valuable tool in the sales process, so do ask what they are doing and then check it out by reviewing their online presence.
Also, take a look to understand what have they done for their clients’ aircraft through the use of creative press. Getting your aircraft placed into editorial media can be very rewarding and a major contributor to a swifter sale.
Are they proactive?
It is important that your aircraft is listed as being “for sale” on the trade databases AMSTAT and JetNet but you’ll be in the very lucky minority if this alone finds your buyer. Such tools, whilst vitally important for the trade, won’t get your aircraft exposed to the retail buyer. Any promise of “global databases of buyers” won’t be enough in isolation; you’ll need advertising, networking, telesales, social media and so on.
How many people/offices do they have to commit to the sales process?
Generally speaking, you may well be better served by a team rather than an individual. And you’ll be even better served by a team that has vital connections to technical data like avionics upgrades, interior options and maintenance schedules.
It’s also worth noting that sometimes, the slickest websites are run by a lone broker operating from a spare bedroom of a suburban semi, whilst purporting to offer a global network. Verify this by checking the facts; check out the other offices, the other individuals, look at their online and print advertising to see what other aircraft they are selling, and so on.
Don’t be afraid to ask for references from satisfied clients.
Check their core activity.
One phenomenon that you may have encountered is the existence of the extended chain of brokers and intermediaries. One contributing factor here is that some brokers are unable to secure their own exclusive mandates and therefore focus their attention on assisting with another broker’s sale or purchase.
It is usually safe to assume that the longer the chain, the more brokers or intermediaries are involved and as a consequence, there is more chance that the deal may fall over.
Brokers who have exclusive mandates have every reason to give your aircraft 100% focus because they know that when they are successful, they will be paid. A non-exclusive broker will sometimes lose interest in your aircraft once they realize that it’s not going to be a quick deal or that there are too many other brokers punting it around the market.
Pay them only when they have performed.
Very occasionally you may find a broker seeking an element of upfront payment, but this is not the norm in the industry. Typically the agreed commission is settled from escrow, upon completion of the sale. However, if you have driven a particularly tight deal, then the broker may seek a compromise of payment for their travel to inspect the aircraft, usually with this sum discounted from the final commission.
With purchase mandates, it is normal for an element of the commission to be advanced.
Who is overseeing the sale process in your office?
From time to time, we come across situations where the appointed representative for the sale of an aircraft is feeling vulnerable and therefore doesn’t provide all of the support and cooperation the principal assumes is being offered. The sale of an aircraft can often unnerve the individuals closest to it – pilots/crew, management companies, maintenance technicians, and so on – particularly when there is no clarity about a replacement. So, make sure that you don’t create such a conflict.
How many competing aircraft do they offer?
Much of my attention so far has been to ensure that you choose a credible partner but at the other end of the scale, where you are working with a known market leader, take a look to see how many similar aircraft they are currently offering. Ideally, you don’t want to be the oldest, highest hours or the most expensive of the 4 “identical” aircraft that they are selling at any point in time.
Exclusive or non-exclusive appointment?
Some owners believe that by giving their aircraft to multiple brokers they significantly increase the chance of it being sold or perhaps that they are getting better value for money, but this is rarely the case. The right broker exclusively mandated will give 100% to achieving a sale and protecting the online presence of your aircraft by preventing secondary, unauthorized marketing. With multiple agents working for you it is hard to retain control and before you know it, someone that you have never heard of is purporting to represent the aircraft but is offering it at a price well below what you would accept. This is not something that will ultimately benefit you or your aircraft.
As for the value for money, the actual commission paid out to either broker will broadly be the same, so you just as well focus your efforts on working with the right partner.
Follow these steps, make sure that you have a leading aviation lawyer, take good tax advice (as appropriate), be realistic in terms of pricing and disposal timetables and there is no reason that your aircraft sales experience won’t be a positive one.
Whether buying or selling, getting the right support is key to the success of your overall experience.
Author, Tim Barber recently joined Duncan Aviation’s Aircraft Sales and Acquisitions team, representing clients in the European, Middle Eastern and African markets. You may reach him at +44 2032 8789 86, +44 7836 352 676 or on SKYPE tim.r.barber. On Twitter https://twitter.com/Tim_bizav and LinkedIn https://www.linkedin.com/in/timbarber2. Since inception, Duncan Aviation has undertaken more than 3,250 aircraft transactions. In addition, the company services more than 2,000 aircraft per year.