The 50K Mistake

Ever make a mistake that cost you $50,000.00? It can happen…

Ever make a mistake that cost you $50,000.00? It can happen…

One of the first acquisitions I did was for a gentleman that called about a B200 King Air that the company I worked for had recently sold. He was very frustrated and began to share the story with me of how he had traveled numerous times, spending money and, more importantly, valuable time, only to discover that the aircraft was misrepresented or was subject to a pending sale.

I suggested that hiring me as an acquisition agent might be worth considering, that I could be the one to travel and spend time weeding through the market to find the right aircraft. We quickly agreed and I went to work. It didn’t take long to find the perfect aircraft. In fact, he had already seen the ad for it and briefly considered going on his own to buy it. Luckily, he reconsidered and we met at the owner’s base airport to demo the aircraft. Everything went well and it was obvious that my client was excited and wanted the airplane, so excited that he almost made a $50,000.00 mistake!

As we stood at the FBO counter and talked about the airplane, just out of earshot of the current owner, my client whipped out his checkbook and started writing. “What are you doing?” I said. 

His response surprised me. “I’m writing him a $50,000.00 deposit check.”

I quickly blocked the seller’s view and said, “Put your check away. Let’s use escrow to hold our deposit.”

The reality is that the buyer would have never seen that $50,000.00 again. The seller would have either kept it or negotiated so strongly that my client would have paid at least $50,000.00 too much for the airplane.

To me it was simple, second-nature. We negotiate the price with our deposit held safely in escrow, its purpose to show our serious intent, but not in jeopardy until we were fully committed to buying the airplane. The client, used to doing business in a different manner, was totally unaware of the trap he’d almost stepped in.

The reality is, the list of very bad things that can happen to a prospective aircraft purchaser is long. Even guys who have bought and sold several aircraft on their own come to us because they know the value of having someone who is 100% focused on the deal at hand. My favorite quote comes from a client who said, “I’ve bought and sold dozens of airplanes on my own. What I learned from doing so is that you need to hire a guy like Chip to make sure you don’t get screwed.”

 TIP: There’s an art to the deal. Small actions can cost you money! 

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