Help With Buying

We don’t know that and unless the facts are checked out this is all guesswork. The important bit is that it has gotten regular maintenance and being under Camo should help too. I think Rob is on the right track with going to see it and doing a ppi. If all checks out then it is one of the more solid M20J I have seen in a while.

As far as prices are concerned, the horrible rep GA has in Europe as well as the general attitude displayed towards sellers has distorted prices massively. If you look at the valuations of Mooneys by Jimmy Garrison, who is one of the top dealers for used Mooneys in the US, European prices fall way short, often up to 50 %. Other brands are no better of. Investments such as avionic upgrades or engine overhauls are equally undervalued, so potential sellers avoid them.

That is because of the European market which was almost dead in past years. In many cases airplanes were almost given away just so the owners would get rid of them and on the buyers side people started to believe they can offer even impertinent prices. In the end this does not help anyone.

As far as prices are concerned, the horrible rep GA has in Europe as well as the general attitude displayed towards sellers has distorted prices massively.

That is a very interesting point. I agree with it as a “fact”, but I am not sure of the cause(s). I reckon the reason why most buyers try to knock the price down so much is simply because they don’t trust the seller (and his maintenance company) to be honest.

And why would that be?

Well, for the maintenance company factor, just read some of the reports posted here… even the most “gold plated” companies in the most “gold plated and proper” countries do crap work a lot of the time. It can’t be discussed with the company names mentioned due to litigation threats (I’ve had some) and it is often not mentioned (except by customers who got treated really badly) for cultural reasons. There is crap work in the USA too but most owners seem to have more choice.

The seller honesty factor is more complicated. Obviously I don’t think Europeans are any more or any less honest than Americans. The difference is that aviation costs a lot more (and comes with a lot more hassle) here than in the USA and we all know how addictive flying is, and IMHO there are just a lot more people over here who are struggling to hang in there, so they skimp on maintenance (in the EASA world this means they collude with the maintenance industry to do a substandard job – I have seen that pretty overtly with flying schools) and when they come to sell the plane, they have more bad stories to tell which obviously don’t get told.

At the same time, good quality planes still do sell for good prices. It is everything else that gets knocked down by some 30% off the advertised numbers.

I would not recommend a novice aircraft owner-to-be to buy an old can of worms. That sort of thing is OK once you have a good team (or a good A&P and are N-reg and have your own hangar where you can work) and you know how the business works, but if you buy a plane which needs 10k-20k of work just to be airworthy, you won’t be happy. And any dodgy seller will see you coming

Prices are not distorted – prices are
(a) asking prices, often highly inflated from emotional attachment rather than technical evaluation (same/worse with boats btw) and therefore not a good indication of what “one will have to pay to get even something of good quality”; owners of mediocre planes look at the top offers on planecheck and take that as guidance (nice anchor idea…); large number of parked planes as indicator
(b) offer prices, often bottom fishing attempts, people who cannot really afford what they are looking at and have delusions about how to still make it worth; and yes the more of (a) you see, the more do you try how much air there is in the seller’s idea
(c) agreed price – what two parties can find as a compromise; and that, nothing else, is what the market value of the plane is at that time in that (regional) market, not the emotional value – the owner can think of it differently and so can the buyer (both probably do).

The real question is often, what is the actual motivation of the seller… ;-)

For private use you have some abstract utility value driven by your own imagination, not calculated value like in corporate investments with returns and/or discounted cash flow. There certainly is no “fair value” IMHO, outside the accounting world, of course, there they have it ;-)

Prices calculated by someone with skin in the game, for a different geography, with different regulatory regime and cost structure, for goods that can only be transferred between markets with significant effort (time and cost) … that is like flying through Europe with a map of the US, just because you don’t have a local one.

Peter wrote:

I reckon the reason why most buyers try to knock the price down so much is simply because they don’t trust the seller (and his maintenance company) to be honest.

I guess the main reason is because they can. Up to very recently and in many cases even now,there are much more planes for sale than buyers. Obviously this will create a climate in which buyers will exploit the fact that sellers will have to relent quite massively in order to sell at all.

That however has several effects on sellers. They start thinking that in the very end it won’t really matter if they keep the plane immaculate, if they do upgrades,if they see to good maintenance, as the market will not honour any of this with the possible exception that it will snap up your plane rather than someone else’s but still at a low price. The other is, that the seller will artificially rise prices above a reasonable level so he has space to move down to what he really wants. Both are harmful for both sellers and buyers.

Peter wrote:

At the same time, good quality planes still do sell for good prices.

Well, even good quality and well preserved examples are often sold way below value just to sell at all. That is what I mean. There are also a lot of buyers out there who sense a sort of gold rush mentality following the ridiculous prices achieved by some, where even high quality planes went for a song and who now will come in with outrageously low offers (I’ve heard of a guy being seriously offeret 10k € for a fully IFR WAAS e.t.c. equipped 30 year old traveller which was announced for 80k).

What I mean is that this attitude of buying on the cheap and selling on the cheap hurts everyone. As you say, maintenance will be deferred or masked so the new owner should suffer, which immediately creates distrust. Upgrades will not be done, which make planes unsellable.

All I think is that buyers should have a perspective of the cost and value of a plane before trying to get one over the seller, as desparate sellers will not help them to get a proper airplane. A bit more fairplay might help both parties.

ch.ess wrote:

Prices are not distorted – prices are
(a) asking prices, often highly inflated from emotional attachment rather than technical evaluation

Correct often enough, sometimes even combined with sloppy adds.

ch.ess wrote:

(b) offer prices, often bottom fishing attempts, people who cannot really afford what they are looking at and have delusions about how to still make it worth; and yes the more of (a) you see, the more do you try how much air there is in the seller’s idea

Again, nothing wrong with that, within reason. But there comes a point where it gets impertinent.

ch.ess wrote:

agreed price – what two parties can find as a compromise; and that, nothing else, is what the market value of the plane is at that time in that (regional) market,

And that is exactly where things have gone too far in the past in this regional market I believe. Reason is needed on BOTH sides, sellers and buyers.

A buyer can NOT expect to get a immaculate airplane with fresh engine and prop as well as latest avionics for 20k. But some do.
A buyer can NOT expect that a 40 year old airplane is in the same or better condition than new and even if it is comes with all the latest stuff.

A “good” buy is a plane which is
a) fly away, that is buy it and fly it. It has good engine and prop times and ADEQUATE avionics to do the mission. No missing mode C or 8.33, no forensically interesting GPS e.t.c.
b) has flown regularly and has been maintained to high standards.
c) a price which reflects that value.

I sometimes see in adds that desparate sellers put in how much they have invested in the last years, only to hear from folks that a) that is their problem (they were stupid to do it) and b) that if the plane needs that much maintenance, they can’t afford it anyhow. So many sellers will try not to do anything at all, which leads to undermaintained airplanes with 1960ties avionics going nowhere.

Then add all the forum experts who have their own standards and judge any plane they are asked about according to those or simply don’t like the fact that someone really can buy a plane and try to talk them out of it because they are envious.

As for valuations, I think both blue book and brand specific evaluations are rather conservative. Market price should move in some sort of relation to these, not simply ignore them altogether. In the Mooney world, Jimmy Garrison’s valuations are quite well regarded and accepted not only in the US but throughout, as they are not inflated but reflect real value based on many factors such as hours, engine and prop potentials, avionics, state of the airplane e.t.c. I am sure there are similar estimates for other brands too which are accepted in the business.

Actually, looking for airplanes for clients recently I have noticed that there is a rebound in prices. The “J” we were talking about earlier is a good example, it is almost spot on with valuation and is fly away by the looks of it. Of course there is room for negotiation but why not in a fair price range.

I am aware that you or the seller might not want this figure to be disclosed, but how much did you pay for it in the end?

Congratulations! I hope you will have a great time with your new plane and we shall meet sometime soon.

Yes, congratulations on your purchase, I hope you enjoy many hours in her (as the actress said to the Bishop……)