The Pre-Buy ExaminationJust Do It
Tight finances for aircraft owners means there are nice-looking, but badly-maintained airplanes on the market. Buying without having a pre-buy examination done could leave you with unairworthy junk.
Face it, buying an airplane involves more of the former Federal Reserve’s Chair, Alan Greenspan’s “irrational exuberance” than it does steely-eyed appraisal—it’s easy to fall in lust with a paint job. That’s especially true after having had an enjoyable time learning to fly while making new friends in aviation—it can be hard to believe that there might be some airplane owners who are less than scrupulous when selling their pride and joy. Sadly, it’s true. There are some real dogs on the market. Their owners either really believe they’re in wonderful shape or are willing to fabricate through their teeth in describing them. And, regardless of the fact that the general aviation fleet is getting long in the tooth, disregard for maintenance by an owner can occur to an airplane of any vintage. Just because an airplane is only a couple of years old doesn’t mean it’s in good shape.
That means, bluntly, if you are buying an airplane, of any age—whether outright or just a share in it—a pre-buy examination by an objective mechanic of your choosing is utterly essential. As a lawyer, some of the most frustrating matters I’ve dealt with have involved airplane owners who bought without having a pre-buy conducted—or had one done by the seller’s mechanic—and then discovered that they’d bought junk and wanted their money back. In one case the airplane had corrosion that cost over $30,000 to fix. One had had a nose gear collapse and repairs that were so bad they had to be redone. A third had the wrong engine installed, so it couldn’t pass its next annual without an engine replacement. Almost invariably, the seller was in another state and trying to prove the seller knew the airplane was in rotten shape would be so difficult, not to mention expensive—or the seller had disappeared or was bankrupt. Too often the buyer was stuck with his or her money pit.
Although this article is primarily about the pre-buy examination conducted after you select an airplane, there are some caveats to keep in mind during your search. They may help you winnow down the field and avoid a lemon: Accept that there are no undiscovered, fabulous deals just waiting for you to uncover—an airplane half-way across the country priced well below others you’ve considered has something badly wrong with it. If it were in good shape for that price, a local would have snapped it up. Also, “fresh annual” and “fresh overhaul” are red flags—consider them traps for suckers. If you were going to sell, how much would you spend on maintenance? If you do pursue such an airplane, it would be wise to assume the annual is worthless and that the overhaul won’t come close to making TBO—and make a purchase offer accordingly.
Insist on a Pre-Buy
The good news is that honest sellers don’t object to a pre-buy examination. Most expect it and will cooperate in coordinating it. You, the buyer, will bear all of the costs, including ferrying the airplane, if needed. Realistic sellers recognize that a pre-buy helps protect them if the buyer later suffers buyer’s remorse and tries to take some action against the seller for misrepresentation of the airplane.
If a seller resists a pre-buy it’s usually a sufficient reason to walk away from the airplane. The times I’ve seen a seller resist for good reason involved logistics, notably where the buyer demanded that the seller fly the airplane a long ways without agreeing to pay the cost of getting it there and back if it didn’t pass the exam.
Once you’ve found an airplane that looks good enough to consider buying, a number of things happen—although the sequence may vary: Getting photos of the exterior and interior, getting copies of the last few years of logbook entries and oil analysis results, as well as printouts from the engine analyzer, if available, negotiation on the price, flying the airplane and getting the aircraft file from the FAA, If the negotiation get serious, the rule of thumb is to agree on a price that is subject to a pre-buy examination. You and the seller may then want to agree on what will happen as a result of the pre-buy. Under what conditions can you walk away? If there are squawks and an estimate for repairs, who pays for the repairs if you go ahead with the deal? If you haven’t flown the airplane, you’ll want to do so at some point prior to the exam (or arrange to have someone you trust do the test flight). Don’t pass on a test flight—a ground inspection, no matter how careful, can’t uncover some potential faults, such as the airplane being badly out of rig.
Now your serious detective work begins. In anticipation of the pre-buy examination you should order a copy of all of the aircraft’s records on file with the FAA—that means everything that has been recorded with the FAA regarding the airplane—all ownership and loan paperwork and all Form 337s (Major Repairs and Alterations). While you’ll get a title search done to confirm that the airplane is free of liens, the paperwork package gives you a head start on the subject and it lets you start doing your due diligence to find out if there is a damage history that has not been disclosed. Generally, big fixes required after an accident or incident require filing a Form 337. However, a certain percentage of owners and their mechanics don’t bother doing so in hopes of not losing resale value on the airplane. The absence of a 337 for a big repair is not proof of the absence of damage history.
It’s not an inspection. Let’s make it clear. Around airplanes, the word “inspection” has specific meanings, especially when the FARs are involved. The FAA does not recognize the term “pre-buy inspection.” Examination is more descriptive of what's being done. Further, the results of a pre-buy exam should never be recorded in an aircraft or engine logbook. It is an examination of the aircraft and its logs to get information about its condition so you can make a decision as to whether you want to buy it. That’s it. It is not a prediction or guarantee of future airworthiness. It’s a snapshot of the condition of the items on the airplane examined then and there. It is a tool for you and your mechanic to use in making the decision whether to buy the airplane.
The exam should be conducted by a mechanic you chose—and who knows the type of aircraft well. Knowledge and experience in type does matter—a mechanic who primarily works on Cessna, Cirrus and Piper is not likely to know the inner secrets of Mooneys. A good way to locate a mechanic is through the type club for the model. Having joined the type club and learned all you can about the marque early in your search benefits you in several ways—learning what to look for and look out for as ammunition for your search and negotiation, getting to know people who are knowledgeable that may be able to help you during the purchase process and as an owner and the chance that a club member may be selling a good airplane.
Discuss the nature and extent of the exam with your mechanic when you retain him or her. How deep do you want to dig? What needs to be looked at to find evidence of undisclosed damage that may not have been repaired correctly? Set it up so that if your mechanic finds what may be a show stopper that he or she comes to a halt right then and tells you so you can make a decision. If you aren’t going to buy, there’s no reason to continue.
Set aside a full day for a pre-buy for non-pressurized piston singles and twins—it may take less—the idea is not to be hurried. Anyhow, you’ve got to allow a few days to get the oil sample you’ll take analyzed.
Once the day comes, the first step is to go through all of the originals of the logbooks (this is one time originals matter—if you buy, you’ll make electronic copies and keep the originals locked up because their loss knocks 10 to 20 percent off the resale value of the airplane). If the seller has told you that all the logs exist and then there proves to be any kind of hassle regarding production of any of the logbooks at the beginning of the inspection, be spring-loaded to walk away. If the logs aren’t all there, ready to go, it’s a major issue. It doesn’t happen often, but I’ve seen situations where sellers, knowing some of the logs are missing, will produce a few right away and then start making excuses and finding one here and one there, hoping the buyer will let it go without realizing the set is not complete. Don’t fall into the trap. The logs are either all there or they are not. If they aren’t, it should have been disclosed up front and the purchase price should have reflected that logs were missing.
There are numerous, good checklists for pre-buy exams, especially those compiled by type clubs. One size does not fit all. Once the logs pass muster, your mechanic should follow the checklist you’ve agreed upon. In my opinion, that includes a borescope exam of the engine, not just a compression check. You’ll also overnight the oil sample for analysis. The good companies will call or email you with the results the next day.
Your mechanic should make a running list of squawks. Assuming no big deal-breaker is found, he or she should then give you an estimate to fix each one. You and your mechanic then have time to discuss how things look overall and in detail.
If things look good, contingent on the oil sample (and the seller may have given you the oil sample history), you and the seller go over the squawk list based on your agreement as to how the cost of repairs is to be handled and close the deal. In my opinion, your mechanic should fix the squawks, not the seller’s.
The first time I purchased an airplane, it was recommended to me that I should have the mechanic who did the pre-buy go ahead and complete an annual inspection. The rational was that the mechanic has already opened up the airplane and done a significant percentage of the examination of the airplane that’s involved with an annual—it’s cost effective to carry on, even if there is a couple of days delay as the sale closes. Plus, I’d then know that I’d had an annual done by a mechanic I’d selected. It made sense to me, so I did it. What I didn’t expect was the peace of mind it gave me on flights in IMC and at night in the upcoming months. I’ve followed the same practice on subsequent purchases and I’ve seen it done when friends bought airplanes. In each case, the mechanic who was doing the pre-buy knew of the plan going in.
I’ve heard about and seen too many aircraft horror shows that resulted from an eager buyer who decided not to have a pre-buy conducted—or had the seller’s mechanic do the pre-buy. In my opinion, a pre-buy is cheap insurance against the financial disaster that can result when you buy a cosmetically covered-up piece of junk. Ownership costs have been climbing far faster than inflation—there are a lot of financially distressed aircraft owners out there who cut back on maintenance before deciding to unload them. A pre-buy is the best way to protect yourself against a very bad ownership experience.
Rick Durden is an aviation attorney and the author of The Thinking Pilot’s Flight Manual or, How to Survive Flying Little Airplanes and Have a Ball Doing It, Vol. I.