One of the most overlooked and misunderstood attributes in the purchase of an aircraft is its “market value” which may be very different from the negotiated price. This issue usually arises because of problems that have not been revealed or otherwise considered. Generally, buyers would like to have an unbiased and impartial option of value before contracting to purchase an aircraft. One of the few professionals who can impartially provide this information is an appropriately trained and experienced professional aircraft appraiser who researches the aircraft in question and relies on creditable sales data. This credible sales data is often not readily available through most publications or websites.
An aircraft appraisal report that meets a reporting standard can be very useful for negotiating and planning of the sale or purchase of an aircraft as well as the financing, insurance and potential tax consequences. The aircraft appraisal report is also a useful informational tool because it identifies attributes about the aircraft a buyer may not be aware of such as damage history, missing records/entries, questionable maintenance, etc. – that may impact the purchase decision or purchase price itself.
Not all individuals holding themselves out to be aircraft appraisers have the necessary training, experience or any background in aviation as there are no standardized requirements for aircraft appraisers. There is also no standardized requirement to physically examine the aircraft, its records or any other details about the aircraft (typically defined as a “desktop appraisal” report). When the purchase is important, make sure you hire an aircraft appraiser who physically evaluates the aircraft and provides you with a comprehensive report of their findings and one who is able to support their conclusions. These findings should be presented in an industry recognized standard. A few examples of appraisal agencies that follow known standards for aircraft appraisals are as follows: The National Aircraft Appraisers Association (NAAA*) and the ASA. Both agencies should be examined to see which best fits your needs. Keep in mind that it is best to work with an appraiser that is not directly involved in a transaction in any other capacity than the role of an appraiser. The best information is obtained through objective and impartial sources and this is certainly true with aircraft appraisers. The next time you are involved in the purchase or sale of an aircraft, it would be wise to consider the services of a well-qualified aircraft appraiser.
*The National Aircraft Appraisers Association (NAAA) ceased operation on 12/31/18. The Professional Aircraft Appraisal Organization, LLC (PAAO) was established in December 2018 to provide certification and professional development for aircraft appraisers. More information about the PAAO be found on their website at www.appraiseaplane.org