The Top Complaints about Aircraft Brokers. Step 1 of 9

The truth about selling your plane.


Nine Successful Steps to Sell Your Plane
Hello, Jake Huling here with Aircraft Sales Advisor. I’d like to welcome you to the first in a new series of short reports that I am calling, Nine Steps to a Successful Sale of Purchase of Your Plane.

My reports, quite simply, are designed to give you what you need, when you need it, and without the hassle of contacting a broker. In these reports I am going to give you advice and information, a lot of which the industry doesn't want you to know, and how to use that information to navigate your way to a successful sale or purchase of you plane. 

I like to keep my reports short as possible so let’s get right down to business.

You can see more of my reports on Selling and Buying Jet and Turboprop Aircraft here.

Complaints:

To start out, I’d like to talk about the top complaints and frustrations I hear from my clients, customers, and new contacts pretty regularly. To make matters worse, these complaints seem to be the same whether folks are selling or buying.

• The number one complaint and frustration I hear is that
  people don’t trust the system, and they don’t trust Brokers. They don’t believe the information they are being given is accurate or for their benefit. They believe brokers are out to only help themselves, and they will say just about anything they think you want to hear in order to get their next sale.
  

  
  
•     The number two frustration and complaint I hear usually goes like this. Someone will call in and introduce themselves, and then say, "All I’d like to do is get some information about the market. I am not sure what I want to do yet, and no one will give me the information I need, they all want me to sign a contract before they're willing to help."
  

Industry Reputation:

Its sad to me the Aircraft Industry has earned this reputation, because it really doesn't have to be that way. Now don’t get me wrong, there are good men and women in this industry. The problem is they and I are far outnumbered by those who think the best way to do business is to think of themselves first instead of their client or customer.

A totally different approach.

Before we go any further, let me explain how my approach is different than what you have probably seen out there. I believe you should be given up front, for free, and with initially no commitment, all of the information and advice you will need to make an informed and comfortable decision about selling or buying your plane. What this also does is give you and the broker a chance to work together. 

I’ll give you an example of why this is important. Take my approach, will it work for you? Maybe and maybe not. But how will you know that if all I wanted was for you to sign a contract before we even get started?

Let me explain a little bit more about my approach. I really believe that if I care about my customers and clients, and I really care about their situation and what’s best for them, I don’t have to worry about myself because I’ll be taken care of in the process. 

The industry however, is afraid that if they give you information up front you will take it and go somewhere else. But I believe if what you are offering a customer or client is of value, why would they want to go anywhere else? 

Commission rates:

Next let’s talk about commissions. That’s a big deal and a lot of people have questions about what a fair or standard commission actually is. So first off let me say, no, there really isn’t a standard commission in the industry. Brokers will typically make their money one of two ways:

     1. They will enter into an agreement with you and have either a fixed fee or a percentage that they will get on the total sale or purchase price of the plane you buy or sell.

2. They will get in-between you and the person buying your plane or selling the one you want. I’ll explain how that works in a moment.

It may surprise you to know I always recommend the first choice. Why? Because it gives you a chance to not only know what the commission is, but also to be able to negotiate how much it is. 

I also recommend, especially if you are selling, that you go with a percentage based commission. That way the broker has a personal stake in how much your plane is sold for. It’s not just a flat fee that they get regardless of whether it sells for a high or low price.

Let me explain more about the second way a broker makes money. This happens when a seller or buyer decides they really don’t want a broker involved, usually because they don’t want to pay for one, and they feel this can save them money. 

The problem and the danger is there is almost always a broker involved, and I can tell you when there’s a broker involved, there are commissions involved. The only difference is with this approach is you don’t know what they're making and that means you also don’t have a say in it.

Who’s really selling your plane?

You see, what happens is this. A broker will come to you and say they would like to buy your plane, but what they don’t tell you is they really don’t want your plane for themselves, they found a buyer for your plane. And they will negotiate a price with both you, and that buyer. 

Once they get an offer from that buyer they will present it to you for a lower amount. It looks like they’re buying it because the offer is in their name, but it’s really just changing hands with a markup that’s usually a lot more than what their commission would have been.

The same thing happens when you’re buying a plane. It’s presented as if it’s the brokers plane with their contact information on it. They don’t however, own the plane or represent the owner. What they are doing is taking the price the real owner is asking, marking it up, and presenting it to you as if it’s their plane, same as before only now you are just on the other side. 

One of the big problems with this approach is, again, you don’t know what the commission is until after the sale, if at all, and if you do find out how much it was, you probably won’t be very happy about it. How much better to know about, and have a say in, not only the amount of the commission, but to also have that person working directly for you, and representing you, instead of themselves.

I also recommend you find someone who doesn’t charge anything up front and gets paid at the end and only if they come through for you with the sale or purchase of your plane. 

Now just imagine not having to pay someone unless they come through for you and deliver. A lot of people in this industry think that’s crazy, but I believe if you really can and will do everything you say, why would you be afraid?

Last but not least

Before you’ll know exactly how much you will pay in a commission, you’re going to have to make some decisions. 

If you are selling, you need to determine the value of your plane and how you want to bring it to market. 

If you are buying, you’ll also need to be able to determine the fair value of a plane you’re interested in, and you’ll need to decide the best way to go about finding your plane. 

So, in my next report were going to talk about how the value of a plane is determined. It may surprise you to know how the industry goes about that; there are some good things and some things you need to avoid. Well also talk about commission percentages and what they should and should not be.

So that’s the next report, thank you so much for joining me on this first report in a new series called, 9 steps to a successful sale or purchase of your plane. 

This is Jake Huling from Aircraft Sales Advisor, looking forward to seeing you on the next one.