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Aircraft / Plane Bill of Sale Form

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An aircraft/airplane bill of sale form is a document used for facilitating the sale of a non-commercial, civilian-owned plane. It serves the purpose of proving that a buyer paid a specific amount of money in exchange for ownership rights to the aircraft. This proof is a requirement for registering the aircraft, which the buyer (new owner) will need to complete after the transaction is complete.

Contents

How to Sell an Airplane

The following are the steps involved in selling a civilian-owned fixed-wing or rotorcraft aircraft:

Step 1 – Determine the Plane’s Value

There are many variables that go into the pricing of a used aircraft. Similar to how the mileage on a vehicle is only one aspect of its condition, the number of flight hours a plane has doesn’t come close to painting the full picture of its value. Some of the factors that go into pricing a plane include the following:

  • Engine hours – More engine hours, especially if the engine is close to needing its scheduled maintenance, will bring down the overall price of the aircraft.
  • Maintenance records – A well-kept airplane will almost always have records pointing to the scheduled services it has received.
  • Equipment/technology – Older planes may have outdated tech or features that need updating. While this isn’t always the case, planes that have had upgrades will almost always see a rise in their value.
  • Airworthiness directives – These can be thought of as “recalls” for an airplane. Although instead of being issued by the manufacturer, they are issued by the FAA. The directives are known issues with the safety of the plane that needs to be corrected in order to be considered airworthy. If a plane has any outstanding directives, this will lower the plane’s value.
  • The market – A “buyers” or “sellers” market is a major factor in what a plane will sell for. If planes are in great demand (or more specifically, if the make and model are in great demand), the seller can expect to sell their aircraft for a much higher price.

For plane owners that aren’t experienced in the process of selling, it is recommended that they seek assistance from a seasoned airplane appraiser. According to the Aircraft Owners and Pilots Association, there are three (3) types of appraisal of varying intensity, as listed below.

  1. Pricing Digest Valuation – This includes the “VREF” Aircraft value reference tool, which is an online tool that allows owners to enter the airplane manufacturer, model, year, and other factors to obtain a general “ballpark” value for their aircraft. Cost: Free
  2. Desktop Appraisal – This is a hired service that is done by an actual appraiser. Although the appraiser doesn’t view the aircraft in person, they will analyze current market data and will factor in any aftermarket upgrades done to the plane. Cost: ~$500-600
  3. Physical (in-person) Appraisal – Similar to an actual pre-purchase inspection, a physical appraisal takes into account every conceivable factor relating to the airplane’s value. This type of appraisal is suggested for those that have unique aircraft or are selling exceptionally valuable airplanes (e.g., private jets). Cost: ~$2,000-3,000.

Step 2 – Use a Broker / List Online

Because there’s no generally recognized certification for brokers of aircraft, a broker should have significant experience and an exceptional sales history. The following is a great quote from Flying Magazine:

“Deciding not to work with a broker is a little like walking into a courtroom without an attorney. You can do it, but it isn’t necessarily wise.”

When interviewing a potential broker, it’s important to ask them questions relating to their methods of marketing the aircraft online, their qualifications in general, what their reach is (if you could sell the plane in another country, for example), if they’ve sold planes similar to yours, if they have experience working with any of your favorite lawyers/escrow agents, their method of accepting payment, the average time length for selling an airplane, and so on.

If the seller is interested in selling the aircraft on their own, popular online aircraft marketplaces include:

Step 3 – Negotiate the Price / Inspection

Once a prospective buyer has been found, negotiations will begin. If the buyer is seriously interested in purchasing, they will most likely request a pre-purchase inspection for the aircraft. Depending on the thoroughness of the inspection and the size of the plane, this can take anywhere from one (1) to several hours.

Step 4 – Receive Funds & Complete the Bill of Sale

Because the bill of sale is a confirmation of the sale (and shows ownership), it should only be signed after the buyer has transferred the funds to the seller. However, the seller can complete the bill of sale ahead of time to make the signing process faster. To ensure the bill of sale can be used by the buyer for registration purposes, it should contain the following key components:

  • The names and addresses of the buyer and seller.
  • If the aircraft is bought from a dealer, the dealer’s certificate number (#).
  • The aircraft’s registration number (#).
  • The full purchase price ($) of the aircraft.
  • The manufacturer, model, and serial number (#) of the aircraft.
  • The full date of the transaction.
  • The signatures of the seller and buyer(s).

Once the seller has received the funds in full for the agreed-upon purchase price, the parties should sit down and sign the contract. The buyer should be given the original bill of sale and an additional copy (for registering). The seller can make an additional copy for themselves if they so choose.

It is not a requirement of the FAA to have the bill of sale notarized. However, it may be required by the state in which the aircraft is being sold. Additionally, having the bill of sale notarized adds legitimacy to the contract.

Step 5 – Transfer the Aircraft

Once the aircraft has been successfully sold, the seller will need to do the following:

  1. Take the aircraft’s registration, complete the fields pertaining to selling, and mail it to the FAA. Note: The buyer will need to obtain a new registration by mailing AC Form 8050-1.pdf to the FAA’s office in Oklahoma.
  2. Remove the aircraft’s insurance.
  3. If the seller has an FCC radio license in the aircraft, this should be removed.
  4. Finally, the new owner should be provided with all of the logbooks and records regarding the aircraft. It’s important they have this to understand when the aircraft will need future scheduled maintenance.

How to Write

Step 1 – Download

The bill of sale can be downloaded in the following formats:

Step 2 – Aircraft Details

The following information will need to be entered regarding the aircraft:

  • Make (e.g. “Cessna”)
  • Model (e.g. “172”)
  • Year built (e.g. “1990”)
  • Aircraft serial number (e.g. “60-001”)
  • FAA Registration Number (e.g. “N12345”)

Step 3 – Sales Information

The price the aircraft was sold for should be written on the first line. After the dollar sign ($), enter the numerical value for the sold aircraft (e.g. “$100,000”), followed by the value in words (e.g. “One-hundred thousand”). On the next line, the full name of the Buyer should be written, followed by the Buyer’s address on the proceeding line. The full date (e.g. “01/01/2030”) in which the aircraft officially sold should be written in the space provided.

Step 4 – Representation of Encumbrances

An “encumbrance” is a type of claim against an aircraft. This can include a loan, restrictive covenant, or other restriction that is exists on the aircraft. If there are none, the field can be left blank.

Step 5 – Signatures

On the second (2nd) page, the day, month, and year that the bill of sale is being completed must be entered. The signatures of the Buyer(s) and Seller(s) will need to be provided on the appropriate lines The date of signing and printed name of each party should be included next to their respective signatures. Once all signatures have been inscribed, the bill of sale is complete. The buyer should be given the original and one (1) extra copy. The seller can make an additional copy for themselves if they wish to keep one for their records.