Selling Your Aircraft to Foreign BuyersAuthor: ClassG
The market for buying and selling used aircraft has grown considerably during the first years of the 21st century outside the United States, mainly in Asia, Europe, Russia and the Middle East. The purchase of aircraft for sale from outside the United States is expected to continue for many more years.
In the United States, the used aircraft marketplace has an understanding that the buyer must conduct its own inspection of the aircraft for sale to determine that the aircraft is in an airworthy condition. Once the title transfers at closing, the new owner accepts all responsibility for the condition of the aircraft and its equipment.
This isn’t always so when dealing with foreign buyers. There have been many cases where foreign buyers and their counselors have attempted to require the survival of various representations and warranties post-closing. There have also been requests for the seller to de-register the aircraft for sale and obtain an Export Certificate of Airworthiness.
This puts most of the inspection work on the seller instead of the buyer. The seller is also at high risk because once the seller files the de-registration request and/or delivers a bill of sale, the seller is no longer the owner of the aircraft, yet the closing will not have occurred and the seller will not have been paid. The time difference between the United States and other parts of the world may result in the seller getting paid several days afterward. During that gap in time, the foreign buyer may back out on the sale. One precaution to help avoid this is for the seller to agree to file the de-registration request or bill of sale concurrent with being paid.
It is usually customary for aircraft transactions to be priced in U.S. Dollars. When a seller accepts a purchase price denominated in U.S. Dollars from a buyer who usually holds his or her funds in another currency, and there is a reasonable lag time between the agreement on price and the closing, currently fluctuations can move either in favor or against either party. For example, let’s say a seller accepted a purchase price in May and the transaction closed in December. If the value of the U.S. Dollar increased between May and December, then the purchase price has gone up for the foreign buyer and the buyer may not be able to go through with the transaction. One way to avoid this is to increase deposit amounts. Most foreign buyers are actually accustomed to paying deposits up to ten percent in escrow, and in the United States deposits can range from three to five percent.
ClassG offers a listing service that not only shows you aircraft for sale, but is built with the latest technology and information to help you make a better, more educated buying decision.
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