Selling & Buying a Jet Or Turboprop on Your Own, What You Should Know. Step 4 of 9

keeping control of your price and information Hello Jake Huling here with aircraft sales advisor. I'd like to welcome you to the forth video report in a new series called nine steps to successful sale or purchase of your plane in the last report we discussed Bringing a Plane to Market and the Different Types of buyers and sellers why different asking prices require different buyers and different strategies to reach those buyers And we looked at the different categories a buyer falls into, and why it's important if you are a buyer to know what type of buyer you are. we also look at how much the differences can be between wholesale and retail prices using for example a 2007 King Air B200. and we covered hot ot go about the search for your next plane, commission rates, what they should and should not be. And I showed you how you can save money when you are both, selling a plane and buying your next one. In this report we are going to cover selling a plane on your own, the pros and cons of this approach, the importance of keeping control of your information and how to handle brokers when they contact you about your plane. your point Selling a plane on your own Let's start out by agreeing we're going to take a look at this one objectively because generally people are very polarized in their opinions on this topic. Brokers for example will usually tell you this is a bad idea and you should never buy or sell a plane on your own, and i wanted to make split on their opinions some of had bad experiences with a broker or brokers and owners tend to be split on their opinions. Some have had bad experiences with a broker or brokers And others go this route because they believe it will save money. Other owners would say you should always use a broker because of the time investment needed when selling a plane or searching for your next one. And there are those who don't know, and don't care to know, all of the technical details needed to sell or purchase a Jet or Turboprop aircraft. So, where do I stand on this? Well, that depends on who you are as an individual or corporation, and on your particular set of circumstances there are times when the right broker the right broker can save you money help you get the right plane, or get your plane sold for a higher price. And I also believe there are times when you as an owner or corporation, don't need a broker so the pros and cons of selling a plane on your own one example of when you wouldn't need a broker is if you're plane was simply changing from one of your companies to another of your companies another example could be if you were selling or buying a plane off market to someone you knew or did business with on a regular basis. Now that approach can work as long as both sides are very comfortable with the plane or planes involving and each party is experienced with this process and have also each owned and operated a similar type of aircraft before. But here's the thing, this scenario can also have big problems. If the plane showed up and is in need of something unexpected and very expensive for maintenance or one side finds out they paid too much production tool for their plane and other dangers when one of the sides has got too little for their plane. Another danger is when one of the sides has never owned a similar jet or turboprop and is unfamiliar with the capabilities and costs associated with their new plane So be careful with this scenario, it can work but you need exercise caution if there's any doubt it might be worth hiring someone who can for a fixed fee look things over answer the questions you may have and protect you while walking you through this process and that could also help protect your business relationships, something else to think about. Some things you may not know if you're going to sell your playing on your own and you plan to put out there on the market there are some things to be aware of I've had owners say they don't want to go with just one broker because it would tie their hands. And wouldn't it be better to not tie their hands and a have many brokers working for them to try to sell their plane instead of having just one. or i really don't want to use a broker because i'll have to pay a commission. these are actually really good questions and they deserved to be answered the first thing you need to know is that there is almost always I mean ninety nine percent of time a commission paid wether you've hired a brokers or not it may not be an amount that you're aware of or find out about until its too late and after the sale, but there's almost always one there always wonder And the question you need to ask is, whether that commission is being paid to someone working for you working for someone else or working for themselves remember in the first video report we talked about how the brokers get inbetween you and the buyer or seller and how it can look like they're the ones selling a plane or buying yours but it's actually just changing hands with a markup thats usually a lot more then you would have paid in any commission. so you end up paying a commission without getting any of the benefits of having a good broker working for you. now if you are experienced in these areas you may be just fine but if you are unsure or uncomfortable it might be better to know what the commission is by having a broker work for you because if they are working for you, you not only know about the commission but you also have a say in how much the commission is. is what's important either way you choose to go this is still something you should be aware of and know about to be careful with because it can cost you a lot of money information to control or not to control the second thing you should know is what happens when information is not controlled what do i mean by not controlled? Well you have to follow me on this next part because it may sound like i'm trying to talk you out of selling a plane on your own but these are things you need to know and have to deal with if you choose to go this rout when information is released into the market without any control a couple of things happen let's say your selling a plane and brokers learn about your plane by calling you and you give them information about the selling price on your plane but no control. Meaning it's not their listing and they see it as an unrepresented plane they each know that any other broker could sell your plane at any time. So instead of a broker representing you with control, and keeping the sale price of your plane up, each Broker who has someone interested in your plane, will offer it to that person with the lowest number they think that that you may take and often it's actually a lot lower than what you would take. the reason they do this is because the first broker who brings you an accepted offer gets paid. so they are not going to spend extra time negotating a higher price for you because one, they don't benefit from it, and two, nobody gets paid for second place in this scenario they also dont get payed for spending extra time helping you get higher sale price so be careful with this something else that can happen with uncontrolled information is the scarring anyway of potential buyers how does this happene, well there are at any given time only a limited number of customers looking for your particular type and year of plane if a buyer is contacting different brokers looking for a plane like yours each of these brokers who know about your plane will show that buyer information on your plane when the buyer starts to see the same plane presented to them several times from different brokers oftentimes with a different asking price, the potential buyer startes to get a little nervous. They also wonder about the information being reliable and possible fighting between different brokers over commissions. And especially when there's a lot of other planes to choose from they'll simply move onto the next one and you miss out on a sale. So how do you handle brokers when they call you? it's important to note that no matter what approach you choose the key is to control your information on the plane you are selling or the one you are looking to buy. when a broker content you the best advice i can give you is that you need to act as your own broker you need to be aware that they are looking for a commission and if they're not getting paid by the buyer or seller, they're going to be looking at your end to get paid, one way or the another. the best thing you can do is to know your information what the plane is worth you're selling or buying and why what your asking price or your offer is and why, and that you understand they're going to want to get paid for bringing you a bukyer or a plane so find out if they are getting paid from someone or not. And if not not talk to them about a commission and let them know you understand how this works and the process and you are willing to pay for a commission. Which also means you need to have that factored in to your numbers. so what's next? Well we just talked about the importance of knowing your numbers and the value of the plane you're selling or wanting to buy. so in the next video report we're gonna talk about one of the more confusing factors when determining a planes value. that is aftermarket upgrades what the different cost involved are the valued it adds to a plane in both dollars and appeal and which ones hold their value. so that's it for this report thank you so much for joining me on this fourth step in my new series of reports called nine steps to successful sale or purchase of your plane this is Jake Huling with Aircraft Sales Advisor and i look forward to seeing you on the next one