Dan had been looking to buy an airplane, and he found one that seemed perfect. It was a 2007 Cirrus SR22 being offered by one of the country’s premier Cirrus-specialized brokers. Dan made an offer for the plane, and the broker accepted. As usual, Dan’s purchase was conditional pending the outcome of a prebuy examination of the aircraft.
In this case, prebuy logistics were a bit complicated because Dan lives near Washington D.C., the airplane was in Texas, and the selling broker was in the Midwest. (In today’s Internet age, this is a common situation.) So Dan wisely decided to take advantage of Savvy’s nationwide prebuy management service.
First, Savvy’s Tony Barrell A&P/IA performed a preliminary review of the SR22’s maintenance records to see if the airplane looked like a good purchase candidate with no obvious show stoppers or red flags. Tony ran a Cirrus Authorized Service Center for many years before he joined the Savvy technical team, so he knows SR22s like the back of his hand. Tony’s verdict was that the plane looked pretty good on paper, and advised Dan that a physical prebuy examination was appropriate.
The task of managing the physical prebuy fell to another Savvy technical team member, Al Hawthorne A&P/IA. When Al reached out to Dan to make arrangements to get the prebuy done, he received quite a shock. Dan explained to him that the SR22 was already in a Texas shop undergoing an annual inspection that was to also serve as a prebuy. Dan and the selling broker had already agreed that the seller would pay for the inspection and the correction of any airworthiness items, and that Dan would pay for any additional work involving issues that did not rise to the level of airworthiness items. Dan and the selling broker further agreed that the purchase would close no later than a date certain that was less than two weeks away.
After he picked himself up off the floor, Al explained to Dan that what he’d agreed to with the selling broker violated nearly every rule that Savvy insists on when managing a prebuy for a prospective buyer. We feel that a prebuy is meaningless unless it is a truly INDEPENDENT prebuy. That means that the shop or mechanic selected to conduct the prebuy examination must be one chosen by the buyer, paid by the buyer, and with sole allegiance to the buyer. Further, the shop or mechanic must be one that has never worked on the aircraft before and that has no relationship with the seller or (where applicable) the seller’s broker.
In this case, the SR22 was in a shop that the seller selected and that had a history of maintaining the aircraft for the seller. That means the shop had a vested interest in finding the aircraft airworthy and pleasing a longtime customer. Since the seller was paying for the annual inspection (which was supposed to also serve as a prebuy), the seller was in control of the process.
Dan’s deal with the selling broker was that he would agree to pay for any repairs to the aircraft to correct non-airworthiness discrepancies. This really made no sense in the context of an annual inspection paid for by the seller, because it meant that Dan would be paying for repairs to an airplane he didn’t yet own, and might never own if the prebuy turned up any show-stoppers.
To make matters worse, Dan had agreed to a deadline that meant the prebuy was being done with a gun to Dan’s head.
Clearly Dan was already emotionally committed to buy this SR22, and in his mind the prebuy was a mere formality. We run into this a lot. It’s not an appropriate mindset when doing a prebuy, but it’s a common one nonetheless.
Savvy’s job was to represent Dan in this prebuy, and we felt that Dan had agreed to an arrangement where the cards were heavily stacked in favor of the seller and against his own best interests. We would never allow one of our prebuy clients to agree to something so fundamentally corrupt.
Unfortunately, Dan had agreed to all this before he engaged Savvy. So Al faced the tough choice of either throwing up his hands and walking away from this bad situation that Dan had gotten himself into, or trying his best to salvage it for Dan. Never one to walk away from a challenge, Al chose Door Number Two.
Salvaging a Bad Situation
Al contacted the Director of Maintenance (DOM) of the Texas shop that was in the process of doing the annual inspection:
Good morning, DOM. As you know this annual inspection is also serving as a prebuy. This is certainly not the right way to perform a prebuy but it’s what we have to work with. Please report your findings after the engine inspection for review. After we review that we’ll determine the next step. –Al
While Al was waiting for the DOM to respond, Dan asked Al if he would ask the shop to install a panel-mounted connector that would allow Dan to hook his handheld aviation transceiver to an external antenna. Al reminded Dan that he didn’t own the SR22 yet, and it was a bit premature to be asking the shop to make alterations to the airplane. (Another indication of Dan’s mindset.)
Four days later, the DOM provided Al with the shop’s inspection results in the form of a computer-generated work order containing a $3,300 charge for the annual inspection itself followed by 25 itemized discrepancies. Of those, 18 were identified as “airworthiness” items and the remaining 7 were shown as “recommended.”
Al started studying the work order and formulating follow-up questions for the DOM. Meantime, Dan reported that the broker was pressuring him to agree to pay for the “recommended” items and get the deal closed. Al advised Dan to resist the broker’s time pressure and give Al some breathing room to do what Dan had hired Savvy to do.
Recommended item #1 was to repair “cowl seal coming off upper and lower engine cowlings.” The shop quoted $127 to fix this. Al recommended Dan approve this repair, and Dan agreed.
Recommended item #2 was to replace the aircraft’s primary battery, a Concorde RG24-11M, because “battery is overdue recommended replacement.” The shop quoted $1,088 to do this. Al advised Dan to decline this item, because Concorde recommends battery replacement strictly on-condition, not at any particular time interval. So does Savvy.
Recommended item #3 was to repair “two soft areas on front cover of nose gear fairing.” Al asked the shop for photos of the fairing, and asked whether there was any sign of impact damage (because if there had been, then the seller should be paying for the repair). The shop replied that they saw no evidence of impact damage. Al recommended that Dan approve this repair at the quoted cost of $315, and Dan agreed.
Recommended item #4 was to replace the aircraft’s secondary battery because “battery is due recommended replacement.” The shop quoted $319 to do this. Because the secondary battery is inexpensive and there’s no established protocol for replacing it on-condition, Al recommended that Dan approve this, and Dan agreed.
Recommended item #5 was to replace the filter in the aircraft’s TKS ice protection system because “filter is due recommended replacement.” The shop quoted $744 to replace this filter. Al recommended that Dan decline this item. We’ve never seen one of these TKS filters come out in anything but pristine condition, so we always recommend leaving it alone and spend the $744 on something more worthwhile (like 100LL).
Recommended item #6 was to replace the electric boost pump because it was “due for recommended replacement.” The shop quoted $2,020. Al recommended that Dan decline this, explaining that these pumps do not wear out on the basis of calendar time, and that they typically last many times longer than the recommended interval.
Recommended item #7 was to replace the rudder-aileron-interconnect bungee that was “overdue recommended replacement.” The shop quoted $237. Al asked the DOM if the control systems were rigged properly and if the bungee looked okay, and the DOM answered yes to both questions. Al recommended that Dan decline this item.
Following Al’s recommendations, Dan declined items #2, #5, #6 and #7 that would have cost him $4,089. He approved items #1, #3 and #4 that cost $761. “Very good! I think you just paid for your services three times over for this prebuy,” Dan told Al, “and I appreciate it.”
Now Dan’s mindset was starting to shift from seeing himself as the SR22’s owner to being its prospective purchaser. “Is there a way to have the shop hold off on doing the repairs I approved until we know for sure that the seller has authorized all the other work?” Dan asked Al. The airworthiness items that would be on the seller’s dime totaled about $11,000, not including the $3,300 for the inspection itself. “It makes no sense for me to put dollars into the aircraft if the seller balks.”
“We can certainly tell the shop to hold off,” replied Al. “You should really be waiting until after the sale closes and you take title to the aircraft before investing any money in repairs. This whole notion of using the seller’s annual inspection as your prebuy is putting the cart before the horse.”
Al asked the DOM whether the seller had agreed to pay for all the airworthiness items. The DOM replied that he had not yet received authorization from the seller. Al advised the DOM that Dan would not be approving any work until the seller had agreed to pay for all the airworthiness items and all parties had reached final agreement.
Two days later, the broker advised that the seller had agreed to pay for the annual inspection and the repair of all listed airworthiness items. The deal closed. Dan had Al instruct the shop to proceed with the $761 in recommended repairs plus install the antenna jack and coax for an additional $250.
Dan’s decision to get Savvy involved in the SR22 prebuy, even late in the game, averted what could have been a real disaster. Savvy’s Al Hawthorne, who has dealt with many hundreds of prebuys in his long career, was able to get this runaway derailed train back on track by asking the right questions and making wise recommendations, and even saved Dan enough by declining unnecessary maintenance to pay for 800 gallons of avgas for Dan’s new bird.
Learn more about Savvy’s Prebuy Inspections, included in SavvyMX, by clicking here.
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