wall of video monitors
A wall of video monitors in London’s The Jet Business showroom helps customers to weigh their options.

Why You Need A Broker

Buying or selling an aircraft? Don’t go it alone.

About 89 percent of buyers and sellers of preowned aircraft work with brokers, according to Amstat, a business aviation market research firm. The question is, why don’t the other 11 percent? Without professional representation, you’ll likely get less than you could have when selling and pay more than you should have when buying. Not using a broker could cost you many times whatever you’d save by not paying his commission.
Here are five ways a broker can bring value to the deal for both buyers and sellers:

1. Identifying the right aircraft. Brokers research and analyze your travel patterns, passenger loads, preferences, financial wherewithal, and other factors to create a mission profile and identify models that meet your needs. They know details about cabin layouts and cockpits, and which aircraft are overvalued and undervalued. Only after a brokerage identifies targets does it consider the inventory, and if suitable candidates aren’t on the market, it will contact owners to find ones who might consider selling.

2. Striking the best bargain. Pricing an aircraft correctly is important for sellers, and recognizing a properly priced model is critical for buyers. But assessing the market can be tough. Though asking prices are publicly disclosed, sale prices aren’t. And because relatively few aircraft change hands in comparison with the number available, it’s difficult to determine market direction for specific models. Even value publications such as Vref and Aircraft Bluebook typically lag the market. Brokers can help by applying historical data to determine comparative values and because their industry contacts give them access to the details of many transactions.

3. Minimizing your time in the market. Every day an aircraft sits on the market, or that you haven’t acquired the airplane you need, costs you money and reduces your opportunities. Brokers minimize time on the market for sellers with marketing campaigns and sales strategies that get noticed by agents of qualified buyers. Meanwhile, buyers don’t waste time on dead-end deals, and worthwhile transactions are efficiently negotiated and consummated. In fact, brokers often buy or sell aircraft that are never publicly listed for sale. Without a broker, you won’t have access to this “off-market.”

4. Facilitating international transactions. The business aviation market has gone global in recent years, with almost half of new aircraft delivered outside the U.S. That means your best candidate aircraft or sales prospect could be almost anywhere, and the transaction may require approvals from regulatory authorities and financial institutions across multiple borders. Just establishing a clear title for an aircraft can be challenging in many parts of the world. Without a broker’s knowledge of international transactions, registration requirements, and onsite contacts, these deals could never get done.

5. Adding long-term value. A broker’s contributions needn’t end once a deal closes. With aircraft failing to retain their historical residual values, brokers can provide post-purchase asset-management services aimed at maximizing your return on investment. For example, they can offer market intelligence, including transaction reports of relevant sales, buying trends, and projections. This data can help you determine what upgrades to install in the aircraft or the best time to sell it.

James Wynbrandt is a private pilot and regular BJT contributor.

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