Getting Ready to Sell – Part II
By: Jerry Temple
Phone: (972) 712-7302 Fax: (972) 712-7303
In the March ’04 issue of the Twin Cessna Flyer, I wrote Getting Ready to Sell – Part I. The article focused on the “Administrative Aspects” of preparing an aircraft for sale. The organization and review of ownership documents, aircraft logbooks and records and equipment manuals were discussed. Much of what I covered would also apply to suggested actions a new owner would undertake. A review of the March ’04 article would now be wise since it leads into this Getting Ready to Sell – Part II (sorry for the procrastination). If you do not have part I available to review, it may be seen at www.jtatwins.com, click on Temple’s Tips – see Tip #27.
In observing 20-25 Pre-Purchase Inspections per year, it would be easy to take two opposite positions on preparations. The first would be to fix nothing. Do as little as possible. Agree to the best possible price and then allow the Buyer to conduct a Pre-Purchase Inspection. Negotiate the discrepancies for items of an airworthiness nature or “squawks” associated with systems.
With this “Fix Nothing” or “Do as Little as Possible” approach, the Seller is gambling that the pilot conducting a Buyer’s Evaluation Flight, perhaps the Buyer himself, is not familiar with how the aircraft and systems should perform or perhaps the Seller is “demo-ing” the aircraft to the Buyer who, once again, is not familiar with the aircraft and its systems/equipment.
Obviously, if the person responsible for determining how the aircraft flew and how well the systems and equipment worked was not qualified, the “squawk list” will be short. So far the Sellers “gamble” has paid off.
Now that the aircraft is on the ground, and in the shop, for the physical inspection, the expertise and experience of the inspectors is critical. This is, of course, true of any type of aircraft. Knowing where to look and what to look for is experience. If the mechanics doing a Pre-Purchase Inspection are not twin Cessna specialists, then as with the evaluation flight, the squawk list will be short. The Seller’s gamble to not fix anything or do as little as possible before a Buyer’s test flight or Pre-Purchase Inspection will have paid off.
However, should the airplane be flown by a knowledgeable and experienced twin Cessna pilot and also be inspected by twin Cessna specialists, then the Seller’s approach may become expensive. The discrepancy list will be long. A thorough logbook review may likely expose problems with past maintenance or negligence.
At this point, a legitimate Pre-Purchase discrepancy list reflecting actual problems discovered during the evaluation flight or the actual airplane inspection and logbook review may have a price tag of $20-25,000 or more.
The opposite approach to preparing a twin Cessna for selling is to have a twin Cessna specialist thoroughly inspect the aircraft with instructions to fix anything that’s not right. For aircraft that have truly been maintained with such a maintenance practice, there should not be much that would be found in need of repair, compliance, etc. This second, and opposite, approach we’ll call the “Make it Perfect” approach. In this case, a Seller believes that it will be less expensive to have a squawk-free airplane and thus attempt to sell at what would be considered top-dollar and to be able to hold that price at the pre-buy. In other words, no required price concession would be necessary because of major discrepancies.
Two special elements of aircraft sales must be pointed out when utilizing the “Make it Perfect” approach. The first is that it often may take longer to sell an aircraft that is considered a top-dollar unit. In addition, the marketing effort to obtain the top-dollar sale price will take longer and will have additional expenses over what I’ll call an average unit. The Buyer willing to pay top dollar for the squawk-free unit will need to be provided with the documentation, facts and figures that justify the Seller’s position. It is nice to think that this high-end Buyer will quickly come along and will act quickly because the aircraft has been so well-maintained and prepared for sale, however, although this Buyer exists, there are fewer of this type and it simply takes time and expense to locate this Buyer and obtain the top-dollar Offer to Purchase.
The obvious and more common approach is somewhere between “Fix Nothing – Do as Little as Possible” and “Make it Perfect” approaches. Let’s hope that a 25-30 year old twin Cessna has been well maintained and therefore no serious maintenance discrepancies are known or will be found in the pre-purchase inspection process.
If there are known problems or the expected likelihood of a problem in an area that has been neglected, then the principle of Seller cost control becomes critical. Regardless of whether the problem is with the autopilot, pressurization or a fuel leak, heater, air conditioning, operational issues, etc., when the Seller addresses the problem before the aircraft is at a pre-purchase inspection, the cost will usually be less. Let’s use an autopilot issue as an example. Not holding a heading (drifting) or pitch oscillations (porpoising) are not uncommon. Like many maintenance issues, the required fix may be minor (inexpensive) or more complex (more expensive). Addressing the problem before the Pre-Purchase Inspection process (including an evaluation flight) means the actual problem is discovered and repaired in the most intelligent way. The Seller may perhaps be allowed to select an overhauled XYZ versus a new XYZ. Perhaps a simple adjustment is all that’s required. Regardless, the true cost of repair is paid by the Owner.
On the other hand, having the problem on the Pre-Purchase discrepancy list creates an unknown answer. When a Buyer or Buyer’s Representative asks a mechanic or avionics technician what the cost will be to fix a problem, the answer may be a wide range. It is simply an unknown. It might be minor or it might be something much more involved. The maintenance specialist can only give a “best guess” cost range. “Perhaps $500 – maybe less – or as much as $2500. It depends. We won’t know until we get in there.” Sound familiar? It’s not being evasive, but simply not knowing the extent of the problem. Maintenance people dislike handing a new owner a much higher than estimated invoice just as much as a new owner dislikes receiving a shocker bill. So the Buyer simply must seek the highest possible concession still based only on a guess. The Seller naturally wants to think its a minor problem, but may be forced to concede a much higher amount than what the actual repair would have cost.
In some cases, it may be necessary to just deal with known problems at the pre-buy. Perhaps the sale is occurring so quickly that there’s simply no time to get a known problem fixed or the cost of logistics may exceed the likely price concession. Perhaps a Seller’s local shop simply does not have the skills or experience to address a certain repair. With the costs to fly the aircraft to a facility by a skilled and experienced pilot as well as the associated fuel cost, airline, hotel, rental car, etc. expenses, the price concession at the Pre-Purchase Inspection may make more sense. However, proceed with caution. Remember that the Buyer will be seeking the highest possible concession due to the legitimate unknown cost that has been presented.
Therefore, with two opposite approaches to preparing an aircraft for sale and without simply saying “Make sure everything works and is clean”, let’s examine with more detail what steps should be taken.
First impression still counts. The statement by an Owner, when being confronted with a dirty airplane, that he takes great care of the aircraft and that everything works in spite of his not being a clean freak, never is a good sign. It’s a contradiction. Wash your aircraft – not just a rinse, but a thorough cleaning. Get all the dirt and old grease, grime and oil off of the landing gear. Lower the flaps and eliminate oil and dirt.
Realize that the Buyer or his/her representative has heard and read much about the twin Cessna exhaust system. When the flaps are lowered, will clean oil-free flaps and flap well be seen or can you write “wash me” in the grime? That white chaulky look is common, but makes no Buyer feel good. The cost to clean and treat it is a small price when compared to the message of poor maintenance and the big “C word” – Corrosion. Compare a dirty, oily and white powdery look to flaps and flap areas that are dry and/or freshly painted. It counts.
At the major General Aviation Airports, there is usually a detailing service that can perform most cleaning and detailing actions. However, if you base in a small airport where no detailing services are available and you simply do not have the time or ability, then here are some suggestions.
Coordinate an upcoming business trip with detailing. Fly into an airport with a detailing service. Fly in the night before if necessary, to allow an 8:00 AM start on your aircraft. Rent a car if you’re flying in to the big airline airport rather than the airport that’s more convenient to your ground destination that you usually fly into.
Put out the word to some young primary or commercial students that you’ll pay cash or exchange some multi-engine flight experience for their cleaning services. You do not need to be an instructor or fly from the right seat to allow a young private pilot working on his/her Commercial Certificate to fly the airplane on perhaps a day trip. The total flight experience is very rewarding to both parties. Also, a call to groups seeking to earn money from car washes, such as Boy Scout troops or church youth groups can produce the labor. You purchase or rent the cleaning equipment and supplies and you may have planted the seed in some young entrepreneur’s mind for an aircraft detailing service or awakened his/her desire to become a pilot. What if, in thirty years, some airline captain is recalling his/her first flight, perhaps in a twin Cessna, which was part of the compensation for cleaning the aircraft? You remember your first flight and you never know what might come of that.
As a part of detailing, let’s clean out the trash in the wing lockers and nose baggage areas, if applicable. Toss the empty oil bottles, soda cans and dirty rags. If the material lining the interior of the wing lockers and/or nose baggage areas is loose and hanging down, simply glue it back.
If your aircraft is a 310 or 340 with a heated anti-ice plate windshield and the aircraft’s marketing is underway or soon will be underway, and the Spec List has Certified for Flight into Known Icing listed, then the “hot plate” needs to be on the aircraft and working. If it’s on the aircraft but is inoperative, then this must be disclosed and reflected in the asking price. When JTA represents the Buyer, the Seller of a 310 or 340 with a “Known Ice Hot Plate” is advised that the unit must be on the aircraft and working or if not operable, reflected in the price. A Seller showing a 310 or 340 cannot say that the hot plate is at home or in his hangar, but it works or at least worked when it was removed. You cannot hand a Buyer a Hot Plate wrapped in bubble pack and assume acceptance of this arrangement.
While we’re on the subject of Deice/Anti-Ice, let’s address the Deice Boots and Windshield Alcohol Deice System and Propeller Anti-Ice System. Do the systems work? Do you regularly test the systems? You should. If not, add to the list of items you need to check on the next regular flight or special test flight. All of these systems can be tested on the ground. Perhaps a quick review of the Systems section of the Owner’s Manual or Pilot’s Operating Handbook (POH) will remind you of a system’s proper operation. Are the boots fully inflating and in the proper sequence? Is the tail inflation light working? Are the boots fully deflating?
Is the Alcohol Deice spraying? Have a gallon of isopropyl alcohol added to the tank located in the aft area of the right wing locker. There’s a lot of plumbing from the tank to the dispersal tubes. Like the windshield washers on your automobile, the dispersal tubes can get clogged up with dirt.
The Propeller Anti-Ice System with its Prop Blade Deice Boots should be checked frequently in pre-flight inspections, especially in the winter months. Remember that on each blade, the boots have an inner and an outer hot spot. The system heats the right prop outer hot spots and then the right inner hot spots. Next come the left prop outer hot spots and then the inner spots. Thus, four heating periods of approximately 30 seconds each. Often a loose or broken wire causes a hot spot to go cold.
Why fix these systems if they are inoperative? Because as discussed earlier in this article, it is usually less costly to repair a discrepancy than to give up a price concession based upon a shop‘s estimated cost to repair. In addition, it’s usually unknown how long it will take to sell the aircraft. Let’s assume that during the weeks or months that the aircraft is for sale, it is still your aircraft to fly. Do you not need or want the aircraft’s systems and equipment operational?
Now let’s check out the cockpit and cabin areas. Again, cleanliness and first impressions count. Clean out the seat pouches. Toss the empty cans, candy wrappers and old, outdated IFR charts and approach plates. Being stuffed with a POH, AOPA Airport Guide, Fuel Reference Books, etc., causes those sagging pouches. Check out all seats for proper forward/aft and recline operation. Check all armrests for proper operation. A Buyer will.
If you’re operating the aircraft with a seat or two removed, I recommend they be installed. Buyers have an image of the interior and it’s best to present it. At a minimum, include any removed seats in the interior cleaning/detailing. This means don’t leave the seat or seats at home when taking the aircraft for detailing. If the removed seats have been stored for a long time, it is wise to look at them as soon as possible. Water stains, rust and tears may have occurred. If any of the stored seats do not match the installed seats upholstery, this must be disclosed in the marketing.
When the aircraft is being washed, do not forget the windshield interior and other window interiors. Some aircraft interior windows haven’t been cleaned in years.
The cleaning of smudges and fingerprints around cabin doors, the cleaning of writing tables and some furniture polish and wood treatments on cabin cabinets does wonders!
Is the relief tube connected or just lying loose within its storage area?
As addressed in the March ’04 Part I article, be certain the required in-aircraft documents are present. Remember the acronym “ARROW”:
A – Airworthiness Certificate
R – Registration
R – Radio license (FCC Permit – now only needed for international operations)
O – Owner’s Manual or Pilot’s Operating Handbook (POH)
W – Weight and Balance
Are the 24-month pitot/static and altimeter/transponder checks current? They need to be, pure and simple.
So let’s now assume you’ve gotten all the required documents on board and have conducted a thorough pre-flight inspection. Before cleaning and detailing, fly the aircraft on a normal business or personal flight or go on a specific systems test flight. Note: The flight should be at normal operating altitudes.
I’ll leave the discussion of a comprehensive test flight for another article, but I’ll mention a few items whose proper operation a Seller needs to be aware of.
Is the battery healthy? Will it embarrass you on a cold morning with a customer present by refusing to operate after various systems have been checked on a thorough pre-flight?
Check the heater and air conditioner if installed, both on the ground and in the air. Check to make sure all modes are operational.
Like Windshield Alcohol Deice and other systems, the Oxygen System, if installed, needs to be checked regularly. Be certain there’s oxygen in the tank, a mask or canulus on board and that the system is checked on a regular or special test flight. If the aircraft has an Alcohol Deice System and an Oxygen System, these systems may require servicing in order to operate properly. Two important thoughts: If the aircraft is regularly operated and will continue to be, then proper servicing of systems is simply normal and wise. Also, if nothing else, service with enough quantity to allow for testing on a sales demonstration flight or on a Buyer’s Pre-Purchase Evaluation Flight.
Regardless of your aircraft’s fuel system’s quantity, if you do not regularly use or exercise the Crossfeed feature, then do so. Check each side. Check it during taxi-out or run-up. Dirt particles can get into the fuel lines. Check them in flight, individually. If Nacelle, aka Wing Locker Tanks, are installed, test for proper transferring operations. This includes start (initializing) and stop (completion) lights. For tip-tank twin Cessnas, check proper operation of the Auxiliary Fuel Advisory Lights and Auxiliary Fuel Quantity.
Much of what is said in this article falls under regular and normal aircraft operations and routine servicing and maintenance. As noted in the beginning of this article, much of what is suggested applies equally to a new twin Cessna owner as well as the owner planning to sell.
The sales approach to “Fix Nothing” or “Fix Everything” varies from Seller to Seller and can vary with different discrepancies. An Owner’s knowledge of the aircraft’s history, maintenance, systems,. equipment and current status is of great value. It will affect decisions regarding aircraft sales preparation, customer demonstration and evaluation flights, pre-purchase inspection discrepancies as well as pricing, negotiations and concessions.
It’s wise to always assume you have a knowledgeable, well prepared and sophisticated Buyer or Buyer’s Representative. Any thoughts of hiding, disguising or fooling the Buyer through the Sales process, from start to completion is simply foolish.
The twin Cessna fleet is getting old. Airframe age and hours only go one way. The Sales process, like the Purchase process is a major undertaking. A well thought out plan with a prove strategy is wise.