Frequently Asked QuestionsJ&L tries to make the process of purchasing your next airplane as simple as possible. For that reason, we have prepared this Q&A to answer some of the most frequently asked questions. If your question is not answered here, please do not hesitate to contact us directly. We are eager to provide you with the information that you need, and to make the process of acquiring an airplane as simple as possible.
Why do you show **SOLD** aircraft in your listings?
What is the typical purchase process for an aircraft?
How much of a deposit is required?
What does my deposit entitle me to?
What happens if I don't begin my pre-purchase inspection by the agreed date?
Who must perform the pre-purchase inspection?
Who pays for the pre-purchase inspection? What if problems are found?
What if problems are found which are not related to airworthiness?
When does my deposit become non-refundable?
What guarantees or warranties are made by J&L or the previous owner?
Why is the Sales Agreement so complicated and legal sounding?
Does the Sales Agreement cover anything else?
What do you mean, Risk of Loss?
When should I secure financing?
What is J&L's role in the transaction?
Can I contact the owner directly?
Do you have any other advice or comments?
Q. Why do you show **SOLD** aircraft in your listings?
A. Jorgenson-Lawrence represents sellers as well as buyers. As a buyer or seller, it is important for you to
have a feel for the types of aircraft that we normally handle, and browsing through our list of sold
aircraft will give you a good idea of what types of aircraft are being traded in the marketplace. Additionally,
you will gain insight, as a seller, of how your aircraft will be marketed by us, and as a buyer, the range
of aircraft that are typically available.
Q. What is the typical purchase process for an aircraft?
A. Normally, there are five steps:
Q. How much of a deposit is required?
A. J&L normally requires a deposit of ten percent (10%) of the purchase price, which has been
dictated by the current owner of the aircraft.
Q. What does my deposit entitle me to?
A. Your deposit secures you the Right of First Refusal to purchase the aircraft at the Listed Price
for a period which includes the pre-purchase inspection, and for five (5) business days after the
pre-purchase inspection. You and we will agree on a starting date for the pre-purchase inspection
at the time of the deposit. We allow the aircraft to be repositioned anywhere within 30 minutes flying time of PAO. If you are notified prior to the pre-purchase inspection that another
valid offer has been made for the aircraft, you have the option of immediately purchasing the aircraft
subject to any airworthiness defects only being corrected by the seller during the inspection, or
withdrawing from the purchase and receiving your deposit back. During the actual pre-purchase inspection,
which begins at the exact moment a licensed, insured FAA mechanic at a non-aircraft-sales facility begins billable work on the aircraft, we will not
entertain other offers. However, this protection ends at 5:00PM on the first full business day after the aircraft
inspection is complete.
Q. What happens if I don't begin my pre-purchase inspection by the agreed date at the time I make a deposit?
A. Your deposit no longer gives you the Right of First Refusal, and will be returned to you. If you wish to retain
your position on the aircraft, you will be required to make an additional "conditionally-refundable" deposit of 5% of the Listed
Price, and to commit to a new inspection date. If you again miss the inspection date, your original deposit will be
returned to you, but the additional deposit will be retained by us for administrative fees. (If, however, the aircraft
fails its pre-purchase inspection and you elect to withdraw from the purchase, your entire deposit will be refunded.)
Q. Who must perform the pre-purchase inspection?
A. That is entirely up to you. When you purchase the aircraft, you are purchasing it "as is", "where is."
What you see (and what you can't see) is what you get. It therefore is to your advantage to be as
thorough as you can on evaluating the general health of the aircraft. Note, however, that if you choose to not
utilize a licensed FAA mechanic for your inspection, the seller is not required to correct any claimed
airworthiness defects, as airworthiness per se can only be determined by a licensed mechanic.
Q. Who pays for the pre-purchase inspection? What if problems are found which must be repaired?
A. You, the buyer pay for the pre-purchase inspection, even if you have requested a complete
annual inspection. It is customary to negotiate a flat-rate for such an inspection. However,
if problems are found which affect the airworthiness of the aircraft (as defined by the Federal
Aviation Regulations), and which would incur additional costs beyond the inspection fee, then
the Seller is responsible (based upon his agreement with J&L) for that portion of the costs
required to make the aircraft airworthy. The Seller has the additional option at this point of
withdrawing the aircraft from sale, whereupon your deposit will be refunded, and you will not be
responsible for any inspection fees. You will not, in this case, be reimbursed for any direct or
indirect expenses in setting up the pre-purchase inspection.
Q. What if problems are found which are not related to airworthiness?
A. These problems might include minor corrosion which will not become a problem for some time,
limited-life components which might have to be replaced in the near future, radios with questionable
quality (but still technically legal), paint and or upholstery imperfections, or other items which you
or your mechanic might feel are not to your taste. You have the right to fail the airplane during the
pre-purchase inspection for whatever reason, however small, and thus be relieved of your obligation
to complete the purchase. However, the goal of most Buyers who have come this far is to complete
the purchase. A middle ground is for you to seek some accommodation with the Owner, who may elect
to correct some of your concerns at his or her expense, or to lower the price. In this event, you should
make your proposal to J&L, who will handle all discussions with the Owner. Remember that the Owner
has the option to reject your proposal just as you have the option to "fail" the pre-purchase inspection,
and receive your deposit back.
Q. When does my deposit become non-refundable?
A. You are required to complete the purchase transaction within five (5) business days after you notify J&L
in writing (simply initialing the appropriate box on the Purchase Order - Sales Agreement will suffice) that
the aircraft has passed your pre-purchase inspection, or by the Settlement Date written in that agreement
which you negotiated with J&L when you made your deposit. If you fail to complete the transaction
(by paying the balance due on the aircraft, and surrendering the title and possession of any trade-in aircraft)
by that date, then your deposit is forfeit, and you have no further claim on the aircraft.
Q. What guarantees or warranties are made by J&L or the previous owner?
A. Used aircraft are uniformly sold on an "as is", "where is" basis. This means that no warranties of any
type are made to you. You are personally responsible for assessing the quality and reliability of the
aircraft before you complete the transaction. According to the
Purchase Order - Sales Agreement that you and a J&L representative must execute,
your completion of the purchase is your warranty to J&L and to the owner that you understand and fully
agree to these terms.
Q. Why is the Sales Agreement so complicated and legal sounding?
A. It sounds like a legal document, because it is a legal document - that is, a contract between Buyer and Seller.
For many people, especially those who do not deal with such agreements on a daily basis, it sounds intimidating.
However, we encourage you to read through it carefully, and without fear. Notice that a very stylized form of English
is used, which is done because certain words have acquired very specific, non-ambiguous meaning in the legal
context, such as "shall" (instead of the softer "will"), or "to wit" (which means "everything written below describes
in detail how we intend to implement what was just said"). Our Sales Agreement simply defines, in very specific,
non-ambiguous terms, much of what we have been discussing here.
Q. Does the Sales Agreement cover anything else?
A. Yes. The agreement guarantees clear title to the aircraft, provides that risk of loss passes
to you at the instant the sales transaction is complete, reminds you (twice) that you are separately
responsible for the payment of any sales or use taxes (J&L does not collect taxes), requires you
to secure financing within five days of the date you signed the agreement, guarantees us that you
have clear title, and obligates you to pay us for any "extras" that you ordered. (We recommend that your financing be in place before you begin your search for the right aircraft).
There is also some standard "boilerplate" that helps the agreement survive in the case of "Acts of God"
and the like, provides that the written agreement is the only agreement between us
(again, to reduce ambiguity), makes each paragraph of the agreement stand on its own merits,
provides a venue for any disputes over the agreement, dictates whose laws apply to the
agreement (California's, not Kentucky's, for example), and (inevitably) looks out for the attorneys -
yours and ours.
Q. What do you mean, Risk of Loss?
A. If - three seconds after you pay us the balance due and we hand you a Bill of Sale and signed
registration form - a Boeing 767 falls on your aircraft, it is your problem (it is your airplane...)
This clause in the agreement alerts you to arrange for insurance on the aircraft - and receive a
written binder from your insurance company to that effect - which takes effect before the date of the
final settlement. J&L will provide you with any necessary information about the airplane that your
insurance carrier requires. Note, however, that your failure to obtain insurance on the aircraft does not
relieve you of your obligation to complete the sales transaction, or sacrifice your deposit. Only your
failure to obtain financing within the required interval, or your refusal to approve the pre-purchase
inspection, are acceptable reasons for you to withdraw from the purchase.
Q. When should I secure financing?
A. We strongly recommend that all financing be pre-approved on a pro-forma basis, prior to you even beginning to look for your airplane. This protects the owner and seller of the airplane from unreasonable delays by a well-intentioned - but unqualified - buyer. Either you are in a position to purchase the airplane (due to your own financial position with your bank, or in general) or you are not. Most accredited lending institutions will be happy to provide you with a pro forma approval for aircraft in a certain price range, and final approval within one to two business days of the submission of final purchase paperwork. You should be prepared to give them a copy of the Purchase Order, as well as an aircraft spec sheet. J&L can provide you with both.
In the event that your bank turns you down, your banker must notify us before five business days have elapsed, and we will refund your deposit, or apply it, with your new, separate agreement, to a differently-priced aircraft. After five days have elapsed, we are free to sell the aircraft to someone else.
In the event that you do not need financing, simply mark the appropriate space on your
Purchase Order, By doing so, you are agreeing to purchase the aircraft subject only
to the pre-purchase inspection.
Q. What is J&L's role in the transaction?
A. J&L is in business to provide buyers such as yourself a match with excellent value airplanes that meet both your mission and your experience level. We have an excellent understanding of the aircraft marketplace, and take pride in locating for you an aircraft that closely fits your needs.
Typically, J&L has been contracted by a third-party owner to find a buyer and complete the sales transaction in the owner's
behalf. J&L's expenses and fees are paid by the owner, not by you the buyer.
Q. Can I contact the owner directly?
A. Not usually. We are your representative. J&L takes pride in providing very real service to both its selling and to its buying clients. But make no mistake about it, we are a business, and we expect to be compensated for the considerable effort that it takes to provide you with just the right airplane. Although we often sacrifice a portion of our commissions to help a buyer and a seller close an otherwise intractable gap, it is unreasonable for you to ask us to work for free. You do not work for free, and neither do we.
On occasion, the rare prospective buyer has been known to contact an owner directly following
considerable behind-the-scenes investigation, to seek a "better deal" (i.e., a reduced price by
cutting out the sales commissions). You should know that each of our owners has signed a sales
agreement with us which provides that they are fully liable to us for the original
amount of our agreed consideration, in the event that they have direct contact with a buyer,
and/or make a separate agreement with you. This is the worst, possible scenario for you,
for it guarantees that the owner must charge you the full original sales price, to secure his
or her desired minimum net proceeds. Better that you should have a friend in the business - us -
for that day when you want to trade up.
Q. Do you have any other advice or comments?
A. Yes. Enjoy your new airplane. Contact us with questions. Think of us when it is time to
trade up. Fly enough to be competent. Stay in touch. And keep the blue side up.
© 2006 What's Up, LLC