Four Questions a Turbine Helicopter Buyer Should Ask in Selecting a Sales Broker Organization
March 25, 2015 By Fred
The last thing most helicopter buyers think they need today is help from a helicopter broker, especially if it is a “buyer’s market”. So why would they need a broker’s help to buy a helicopter?
The simple answer: An experienced helicopter broker can save them tens of thousands of dollars, a great deal of time and aggravation and protect them from future unforeseen expenses. Unfortunately, many helicopter buyers do not realize the benefits that can be derived by working with an experienced, knowledgeable and most importantly…an honest broker.
People use brokers every day to buy homes, obtain financing, purchase insurance and make investments. Yet, when it comes to buying a helicopter, many buyers think they can personally handle the intricate details associated with the process. Of course there are some who can, but most simply lack the knowledge and experience needed to navigate all of the issues involved. We often run into people who were dissatisfied with their buying experience and with few exceptions, they managed the transaction without the assistance of a competent qualified broker.
By not using an experienced broker, the amount of money that most turbine helicopter buyers leave “on the table” is substantial.
Granted, it is difficult for a buyer to believe that a broker can be anything more than an additional expense when there are hundreds of helicopters for sale and supply exceeds demand. The fact is these are exactly the reasons why a broker can be of help. Most helicopter brokers charge 2-3% to assist helicopter buyers …commonly referred to as an “acquisition agreement”. [I cannot think of a single instance where we failed to save our client more money than we were paid for our assistance…usually saving substantially more.]
Here are 4 important questions a helicopter buyer should ask when considering the purchase of pre-owned helicopter:
1. Do you or does your broker have solid knowledge of the new and used helicopter market?
Most buyers think they understand the market situation. However, searching the internet and looking at a few web sites does not necessarily compare to the amount of knowledge that a good broker has, regarding things that affect the market in general and specific aircraft makes and models. There are dozens of factors that impact the overall market on a daily basis. Then there are things that affect the specific model of helicopter you may be seeking to acquire. Component status, mandatory bulletins, equipment configuration and aircraft records are but a few of the things that can substantially impact the value of a helicopter.
2. Can you or your broker write an effective “OFFER TO PURCHASE” or “CONTRACT” to acquire a helicopter?
Most people believe that any agreement written by an attorney must be a good one. From a legal standpoint, this may be true. On the other hand, unless you are dealing with an aviation attorney with specific experience in helicopters, it is unlikely that your attorney has the expertise and technical knowledge necessary to protect your interests to the fullest extent. This statement is not meant as an indictment of attorneys, but rather it is intended to highlight the fact that there is an overwhelming amount of technical data pertaining to the purchase of a helicopter that if not properly addressed, in writing, can and often times will adversely impact the buyer. In short, the best way to assure a positive result and avoid unnecessary problems and expenses is to employ the services of an experienced helicopter broker.
3. Do you or does your broker have sufficient knowledge and experience to negotiate price and other terms and conditions in order to purchase a helicopter?
Negotiating the purchase of any commodity requires some level of skill and knowledge. Acquiring a highly complex piece of equipment like a helicopter requires a level of experience and knowledge that very few people possess. As a buyer, unless you have that expertise or retain it from a broker, you will almost certainly pay the price…literally! Too many buyers become focused on purchase price and can overlook other critical terms and conditions. Some buyers become enamored with paint and interior and pay little regard to maintenance status of the helicopter. Are inspections current? Are bulletins up to date? Are records complete? Any accident history? All of these things and more are important and a good broker will be able to navigate these issues and help you to keep more money in your pocket.
4. Do you or does your broker have the logistical knowledge and experience to support your acquisition of a helicopter?
Once a potential helicopter is identified and determined to be acceptable to a buyer, there is still much to be considered. An escrow agent needs to be designated. The closing process must be clarified. Perhaps the aircraft needs relocated or the buyer wants to make some changes to the configuration.
Buying a helicopter from another country is sometimes an option that is often financially attractive…provided you or your broker is familiar with how to manage an international transaction. Now you are working with export issues, ferry issues, air and ocean freight shipping and certification issues to move a helicopter from one country to another.
Regardless of the scenario presented, an experienced broker has probably already dealt with it multiple times and has the necessary contacts and expertise to facilitate these things.
The challenge, as brokers, is to educate our clients and potential clients, to help them become aware of our experience level and capabilities…as well as limitations. Like with any service business, there are good brokers and bad ones. The challenge that any buyer or seller has, is to identify which is which. A good place to start would be to ask the questions presented here.
To find out more about this topic or if you have any questions please feel free to contact us at 817-354-0400 or [email protected].