One of the first decisions you need to make when deciding to sell your airplane is whether or not to use an aircraft broker. Your decision on using a broker or not will depend a lot on how much time you have and if you have the budget to pay 10% of your sales price to them.
There is no doubt that using a broker saves you time and effort. Once you sign an agreement with one they take care of almost everything. But, before you give up 10% of your sale price, you should ask yourself this:
How much time and money will it take me to do what the broker does?
If you talk to an aircraft broker or check out one of their websites they will be more than happy to make a very big deal about how hard it is to sell an airplane. They will tell you buyer horror stories and make it sound like it is the most painful thing in the world to sell an airplane yourself.
I can tell you from experience, it's not that painful. Before you sign up with a broker read the rest of this article to get a sense of how much time and effort is really involved in selling an airplane yourself. At least then you can make an informed decision.
How Much Do Brokers Cost and What Do They Do?
Similar to a real estate agent an aircraft broker will handle your sale from start to finish.
To start a broker will help you to evaluate the value of your airplane and determine an asking price. Then they will oversee the preparation of your airplane for sale and take pictures. They might engage other service providers which you will pay, like Wing-Waxers, to detail your airplane.
Once an airplane is ready to show they will handle any advertising, typically listing the airplane on their own website and putting ads in major online/offline resources like Controller and Trade-a-Plane. They will also typically share the listing with a network of affiliated brokers in hopes of finding a quick buyer who is looking for exactly your airplane.
Perhaps most importantly, the broker will take all the phone calls and answer emails about your airplane. They will handle the questions from potential buyers and deal with any "tire kickers." When it comes time to actually show or fly your airplane for a potential buyer they will do the work for you. Again like a real estate agent they will handle negotiations to get to a final deal with a buyer.
Finally when a deal is ready to be done they will handle all the final details like the sales agreement, getting the sale through a pre-buy inspection and coordinating escrow services.
At the end of the process you get a check for the sales price minus 6%-10%.
Most brokers use a sliding scale for their feels like this:
- Less than $100K = 10%
- $100K - $150K = 8%
- $150K - $500K = 6%
- $500K - $1M = 5%
- $1M+ = 4%
This is just an example. Broker fees vary, sometimes widely. You may find one that is more like 11%-12% at the top end or that have different thresholds for their discounts. Often they will add 1% if your aircraft has any damage history or is being sold without being airworthy.
How Much Work Is It Really To Sell An Airplane?
Now that you have an idea of what a broker does and what they will charge you to do that work let's figure out how much time is really involved in selling your airplane.
If you properly price your airplane and take the time to make sure it is airworthy and clean you should have it sold within 3 months. Let's assume a 12 week sales cycle. I'm going to exclude any time that you would otherwise have to spend on the airplane if you use a broker or not. We'll also make some basic assumption on how many calls you can expect on average and how many people will actually want to come and see your airplane.
- 4 HR - Prep Time, Research, Pictures, Washing
- 2 HR - Placing Ads
- 2 HR - Prepare an Internet Spec Sheet (or pay someone $50)
- 24 HR - 2 HR per week on phone calls and emails
- 12 HR - 2 HR every 2 weeks showing your airplane
- 4 HR - Time spent on closing, working with escrow service
Grand Total: 48 Hours
Even if the time spend on showing and calls is underestimated by 50% you're still only looking at about maybe 72 hours total... Spent over 3 months. Once you get the airplane listed we're talking about 2-3 hours per week.
But how much money will you have to spend?
That is a good question. A broker will pay for the advertising so you should factor that into your decision. Again let's assume a 3 month sales cycle.
If you list on the top three sites out there, Controller, Trade-a-Plane, Barnstormers you can expect to pay about $150 per month for a piston single/twin.
Total Cost: $450
So how much is your time worth? Let's say you have a $75,000 airplane. Can you squeeze in 48 hours over 3 months to save $7,000? If you are a lawyer who bills out at $400 an hour maybe not. If you are a doctor or business owner who absolutely does not have the time to deal with calls and show your plane then a broker is worth it. Can you afford that $7,000 or are you counting on that money to buy your next airplane?
My guess is that if you are the average light aircraft owner there's a good chance you have 3 hours a week you can spend on selling your airplane. Plus don't forget that selling your airplane can actually be fun! You will get to talk about your airplane and flying with other pilots, something that you probably do more than 3 hours a week already.
To go with a broker or not may be a simple choice for you but if you are on the fence hopefully the info here will help you make a more informed decision.
Photo Credit: amagill (Flicker CC) (Money Roll)