- 26 Feb 2021
- Dave Higdon
Looking for an accurate valuation on your business aircraft? An aircraft appraisal is an important method of knowing the true worth of your jet. Dave Higdon spoke to Jeremy Cox about ensuring the appraiser you choose ‘really knows their stuff’…Back to Articles
When it comes to buying and selling business jets and turboprops, everyone has an opinion. The buyer will have a good idea of what they want to pay, and the seller will know what price they want to achieve. The eventual sale price can be something quite different, depending on several aircraft-specific factors, and market forces...
For this reason, a professional evaluation of an aircraft’s value can prove very useful – helping establish an ask price in line with the aircraft’s true pedigree. As one local aircraft appraiser told AvBuyer recently, “Often, aircraft appraisals don't cost as much as they pay”.
A comprehensive aircraft appraisal would certainly pay if the owner discovers their airplane to be worth more than they realized. It also pays in terms of the time saved reconciling the differing opinions of buyers and sellers over what the jet for sale is truly worth.
But, as with so much in aviation, getting the full benefits offered by any appraisal will hinge on a variety of factors that we will examine here.
The Key is in the ‘Accredited’ Part
As one busy aircraft appraiser explained, becoming an accredited appraiser involves significant effort, testing, and the stamp of approval from an organization of appraisers. The Professional Aircraft Appraisal Organization (PAAO) requires its participants to adhere to a specified set of ethics.
As the current organization that certifies, trains and tests would-be appraisers who seek its approval to become credentialed aircraft appraisers, PAAO came into existence a few years ago to fill the gap created when the previous appraisers’ association folded.
Since then PAAO has become the focus on recruiting, training and certifying aircraft appraisers, and, in turn, the appraisals they produce. Hence the emphasis on seeking an accredited appraiser.
The organization is careful in the professionals it selects, all of whom must demonstrate training, comprehensive research, and detailed reporting, along with credible, reliable opinions of aircraft values. Moreover, those accredited professionals only work within the aviation industry, and know it well.
Ethics in Appraising
Jeremy Cox, President and Senior Appraiser at JetValues-Jeremy, LLC is among the busier aircraft appraisers in the field. In 2020 he performed 98 appraisals, and among his favorites were the rare and unusual aircraft – particularly the one-offs. He recently had the opportunity to appraise a World War II veteran Douglas C-47 Skytrain, and was in his element examining the old aircraft, pouring over its decades of records and logs.
“I love those old, unusual aircraft. It's more interesting for me as an appraiser than another business jet – though I love doing those, too.” Among his recent business-jet appraisals was a Bombardier Global of far more recent vintage. “Every appraisal is different, requiring attention to the details.”
But buyers and sellers should not expect a ‘yes-sir’ nod to their valuation suggestions from an ethical accredited appraiser. “I consider it to be unethical for me to be engaged in any form of aircraft transactions. It's wrong,” Cox states.
Not that everybody who seeks out an appraiser's work understands those limitations up front. “Somebody will come to me to do an appraisal, and they will give me their impression on what it's worth,” (which the person is free to offer). “Talking to me about an airplane during an appraisal is confidential.”
By confidential, Cox means on a level akin to a confessional with a priest, or a conversation with an attorney working for the client. “Nevertheless, it is unethical for me to take a pre-arranged valuation and use it as the appraisal,” he clarifies.
Cox applies those ethical limitations to all his work, whether he’s undertaking a ‘desktop appraisal’, performed using the aircraft records, but without visiting the aircraft, or an ‘on-site appraisal’, for which the appraiser visits the aircraft in-person, inspects it, and reviews the totality of its records.
Understand the Fees and Variations
Naturally, appraisers charge more for on-site appraisals than for desktop ones. And appraisers tend to set a different fee level for different categories of aircraft – a fee schedule which potential clients should request and receive before contracting with an appraiser.
As an example, the fees Cox charges vary according to the aircraft's maximum gross take-off weight (MGTOW) and, of course, the aircraft type. Beyond these, appraisers set their fees according to the number and type of engines (i.e. single- or twin-engine piston; single- or twin-engine turboprop; single-engine, twin-engine, or tri-jet).
“For a full on-site appraisal, where I am required to travel to where the airplane is, I apply a rating system based on what's in front of me, and I work through the logbook,” Cox explained. “I photograph the logbook pages for future reference.”
“The appraiser is there to observe the condition of the aircraft. They are not seeking out legal and compliance issues (about the aircraft). The appraiser is not functioning in the role of a policeman.
“They are simply there to seek out all the issues that might impact the value of the aircraft,” Cox clarifies. After that on-site visit, the appraisers typically return to their offices to complete their reports.
Tips When Hiring an Appraiser
The appraiser is “there to seek out all the issues that might impact the value of the aircraft,” Cox continues. When they complete the appraisal, the product of that effort should be a detailed report for the person who hired the appraiser.
When selecting a trustworthy appraiser, Cox offers the following tips:
Jeremy Cox is the President, Senior Appraiser and Expert Witness at JetValues Jeremy, LLC – an aircraft appraisals company that he founded in 2019.
Very active in the aviation industry, he holds valid A&P, IA, and FCC Licenses, and a Commercial Certificate with Instrument Rating. His aviation career began age nine when he started helping out at the UK-based Dorset Gliding Club.
He has since amassed a wealth of experience and knowledge with full service FBO and repair stations, aircraft parts manufacturing companies, and as Vice President of aircraft sales company JetBrokers, Inc., before focusing on a career as an accredited appraiser.
More information from www.jetvaluesjeremy.com and https://appraiseaplane.org/