- 14 Nov 2022
- René Armas Maes
- Aircraft Ownership
When it comes to completing the sale of an aircraft, what is the ideal measure of give-and-take between seller and buyer, and how can sellers keep a true perspective throughout proceedings? René Armas Maes concludes the series…Back to Articles
How much give and take should sellers expect when getting an aircraft transaction over the line? Following are some practical tips to help ensure negotiations are balanced, and the aircraft sale reaches a successful completion.
In previous articles within this series, we have looked at questions of how to research the marketplace and understand your private jet well enough to price it correctly, giving yourself a stronger negotiating position over the agreed sale price. Next, we considered some of elements of negotiation required when drawing up a purchase agreement for the sale of the aircraft.
But what other negotiation strategies can an aircraft seller utilize to obtain the best value for their aircraft? The following practical steps should provide a sound framework for both parties to negotiate happily.
Pre-Purchase Inspection Discrepancies
Following the pre-purchase inspection, the likelihood for disagreements to arise between buyers and sellers over what should be done about any discrepancies grows. For example, should every item on the list be repaired or replaced? Who should pay, or what should justify an adjustment in the sale price?
From the seller’s perspective, the key question is whether the discrepancy impacts airworthiness or not. If it does, it is the seller’s sole responsibility to fix it. If it does not, then the identified item is open for negotiation.
Sellers should be well prepared, understanding the implications of different discrepancies so that they can be appropriately addressed at the negotiating table. As a seller, leave no grey area as to what is and isn’t your responsibility to fix.
Everyone’s a Winner…
During an aircraft transaction, both buyers and sellers will be hoping to get a great deal. This is especially the case for highly desired aircraft types in excellent condition, that are equipped with all the latest technologies.
The goal of negotiation is to settle any differences that arise, reaching the middle ground so that both parties continue to feel like they’re getting a great deal. To achieve this, it helps to put yourself in the shoes of the buyer and see things from their perspective.
If the negotiations are too one-sided with one party claiming all the ground without making any concessions, good will is likely to be in short supply over any bigger issues that arise – potentially leading to the deal collapsing.
As the seller, it pays to take a step back from the aircraft emotionally. Is your aircraft as attractive to the buyer as you think it is? You may have customized the interior to reflect your personal tastes and needs (and for your needs and purposes it truly is the most stylish, functional jet on the market), but the buyer won’t necessarily share your enthusiasm.
The buyer may have a list of items they would like to eventually change to make it ideal for them, and a price they’d like to achieve to make those future alterations feasible. How much concession are you prepared to give to ensure the transaction remains attractive, and on track? Have a firm boundary in mind with this regard.
Be a Good Listener
There is a wise belief that the party who listens and watches the most wins. Be attentive to the buyer’s needs. Create a solid negotiation strategy based on value as they see it and submit your counteroffer based on solid research and market intelligence.
Attentive listening and solid, analytical research can help diffuse negotiations when tensions are rising, optimizing the chance of successfully closing the transaction on time and at the right price.
Moreover, your research will help you see what statements are true and which are not from the buyer, and correct errors with data.
Be Prepared to Walk Away…
Finally, a well worded Letter of Intent will still allow you to walk away from the table if negotiations cannot resolve an issue – but only as a last resort.
Chart A: ‘Ten Step Methodology’ for a Successful Aircraft Transaction
The preceding series should give sellers all the tools needed to optimize the chance of success at the negotiating table. If you missed any of the previous articles, find them on AvBuyer, here: