Section 5: Making an Offer

A. How to Negotiate

Negotiation is about aligning the value of the aircraft with its actual condition, history, and near-term costs. By this stage, you should have a working understanding of comparable aircraft, engine hours, maintenance status, and any known upcoming work. That information gives you a foundation to approach negotiation with confidence.

It is also important to recognise that not every aircraft invites the same level of negotiation. A well-maintained aircraft with strong records and recent investment may justify a firmer price. Others, particularly where there are gaps or upcoming costs, allow more room for discussion.

Approaching negotiation in practice:

• Base Your Offer on Comparable Evidence – Look at similar aircraft currently on the market. Factor in engine hours, avionics, and overall condition. When you present your offer, reference these points.
• Account for Immediate and Near-Term Costs – If the aircraft is approaching an engine overhaul, major inspection, or ARC renewal, these are real costs that will fall to you shortly after purchase.
• Present a Clear and Reasoned Position – A concise explanation of how you arrived at your offer shows the seller that you understand the aircraft and are approaching the process seriously.
• Understand When to Hold or Move – If the aircraft is well-positioned and competitively priced, pushing too aggressively may risk losing it. In other cases, where there is uncertainty or upcoming cost, holding your position is justified.

B. Private Sale vs Broker Purchase

Whether you are dealing directly with a private seller or through a broker will shape how information is presented, how negotiation is handled, and how smoothly the process progresses.

Private sales can appear more straightforward at first glance, particularly where there is direct communication with the owner. However, they often place more responsibility on the buyer to manage the process and verify documentation. Broker-led transactions tend to bring more structure and consistency.

• Process Structure and Coordination – In a brokered transaction, there is usually a defined process with clear stages. In a private sale, the structure depends largely on the seller.
• Quality and Presentation of Information – Brokers tend to prepare listings with more complete documentation. In private sales, you may need to request and piece together this information yourself.
• Negotiation Approach – Negotiation in private sales is direct and can vary significantly. Brokers help frame discussions in a more balanced way.
• Support Through Completion – A broker can assist with drafting the purchase agreement, handling deposits, and managing communication. In a private sale, you may need to involve external advisors.

C. What a Purchase Agreement Must Include

Once an offer is accepted in principle, the transaction needs to be formalised through a purchase agreement. This is where informal discussions are translated into clear, binding terms. Without a well-structured agreement, there is a risk of misunderstanding or dispute later in the process.

A well-structured purchase agreement should include:

• Full Identification of the Aircraft – The agreement should clearly state the aircraft registration, serial number, and a description of what is included in the sale.
• Agreed Price and Payment Structure – The total purchase price, how it will be paid, and any staged payments should be defined.
• Subject to Survey or Inspection Clause – This is a critical protection for the buyer. It allows the transaction to proceed subject to a satisfactory pre-purchase inspection, and provides a framework for renegotiation or withdrawal if issues are identified.
• Deposit Terms and Handling – The agreement should set out the deposit amount, where it will be held, and the conditions under which it is refundable.
• Timeline and Completion Conditions – Key milestones such as inspection dates, final payment, and transfer of ownership should be outlined.

D. All About the Deposit

In most UK aircraft transactions, deposits fall within a typical range, but the structure around them is more important than the amount itself. A well-handled deposit protects both parties and allows the aircraft to be taken off the market while checks are completed.

For the buyer, the key consideration is ensuring that the deposit is tied to clear conditions, particularly around the outcome of the pre-purchase inspection and any unresolved questions in the records.

What to understand about deposits:

• Typical Deposit Range – Deposits are commonly set between 5% and 10% of the agreed purchase price.
• Held by a Neutral Party – In many cases, the deposit is held by a broker or solicitor rather than the seller directly, providing reassurance that funds are managed independently.
• Refund Conditions Linked to Inspection – Where the agreement includes a subject to survey clause, the deposit is typically refundable if the inspection reveals issues the buyer is not willing to accept.
• Non-Refundable Scenarios – If the buyer withdraws outside the agreed conditions, such as a change of mind, the deposit may be forfeited. This is why it is important to ensure all relevant conditions are clearly defined.