by Jason Zilberbrand, ASA
No online likes surprises – especially expensive ones.
As a potential aircraft owner, you want to make the most informed decision when purchasing an aircraft.
If you are a current aircraft owner, then you might be looking to organize your assets for estate planning.
No matter which side you stand, the one thing both of these groups have in common is the eventual need for a trustworthy and accurate aircraft valuation.
10 Insider Tips to Get The Most Accurate Aircraft Valuation
While evaluating an aircraft seems like a fairly simple concept, there are some common mistakes that can be made throughout the process. When it comes to such a big investment, you don’t want to be swindled. Here are 10 insider tips you should know before you settle for just any aircraft valuation service company.
1.Conforms To Set Appraisal Standards
Part of finding a reliable evaluation for an asset, such as an aircraft, is locating an experienced professional. When browsing appraisers and valuation experts, you should check to see if they are part of the Uniform Standards of Professional Appraisal Practice (USPAP).
What is USPAP?
USPAP is the nation’s foremost authority on the valuation profession.
A need was seen for a set base of standards for professional appraisers. So several professional appraiser organizations combined and created a committee to help regulate and set congressionally authorized standards. Since 1987, USPAP has served as the widely accepted group of appraisal standards in the United States.
Learn more about VREF’s USPAP compliant aircraft appraisals here.
2. Experience And Expertise
You could find a variety of appraisers available in a Google search. But you want one who knows and is familiar with the aviation industry inside and out.
There are obstacles to face when dealing with aviation appraisals. Specifically, there are no legal regulations in place for someone to call themselves an aircraft appraiser. All this to mean, you will need to embark on your own journey to find someone with the proven experience and expertise to back up their evaluation.
This will prove to be beneficial in getting the most accurate overview of an aircraft.
3. Sufficient History Data
You don’t want to leave any stone unturned, or you could end up with an appraiser who is only doing their best guesswork. Providing a careful and accurate aircraft valuation consists of relying on a ton of paperwork and documentation. You don’t want to make the mistake of choosing someone who isn’t familiar with or does not have access to critical information regarding your aircraft.
Any reputable aircraft appraiser should have access to:
Engine and maintenance records
Damage and history documentation
4. Large Aircraft Database
Explore your appraiser options and get to know each one. Then compare before you choose. Your appraiser should have enough data within their database to make an educated and comprehensive appraisal.
Just to give you an idea, VREF offers over 600 models of aircraft in their database, while others have only around 160. That’s a huge jump and one that you should look out for, too.
5. Proven Reliability
You’ll need to do what you can to pinpoint valuation and appraisal service companies that have a proven track record of helping their clients. It sounds simple enough. However, when your main focus is on a large asset such as an aircraft, you want to look for specific indicators to determine their worth.
VREF offers an ideal example of this in being a trusted and accurate aircraft valuation service for Aircraft Owners and Pilots Association (AOPA). Recommended by AOPA, VREF provides additional services that allow pilots to receive a more accurate appraisal and verified values.
In addition to its appraisals backed by the AOPA, VREF’s mission is to be a place that buyers, sellers, and lenders can turn to for an unbiased and knowledgeable valuation service.
6. Search And Compare
As a buyer, you will narrow down a budget and essential idea of which aircraft you’re in the market for. Then you will follow this with a search for a small variety of aircraft you’re interested in. When you compare evaluation findings from each one, you can get a better sense of the major differences between each aircraft when you have the data to back them up.
7. Valuations vs. Appraisals
As a seller, valuations will not likely reflect any cosmetic installation, aviation installation, or upgrades. If they are placed as part of the appraisal, the difference may not be stark enough to make a major difference. Remember, the job of an appraiser is to determine a fair market value for the aircraft as a whole and is different from an asking price.
A market value is an accurate ballpark amount that any potential buyer might be interested in paying. An asking price is an amount set by the seller and is usually a good place to start negotiating. This is why a seller who makes several interior and avionic upgrades, part replacements, and routine inspections beforehand may not see everything directly impacting a market value amount.
8. Reasonable Timeline
Fortunately, you shouldn’t have to wait too long to receive an objective appraisal. On average, most aircraft appraisals take anywhere from 3 to 5 business days. But tack on another 3 to 5 business days for physical inspections.
If you need to speed up your timeline, VREF offers a turnaround of 2 days for valuations and same-day valuation reports for financial institutions.
9. Availability Of Your Appraiser
Next, you need to find an appraiser who will be available to provide its services on a convenient basis for you. An appraiser who is hard to reach or unresponsive is probably not the person you want to rely on when buying or selling your aircraft. Make sure you are able to reach an appraiser who strives to keep you in the loop before and during the process.
10. Understanding Types Of Appraisals
In line with a full appraisal, you might also run into the terms “desktop” and “physical” appraisal.
A desktop appraisal does not include a physical inspection, nor does it consider maintenance records of the aircraft. The results of a desktop appraisal come from an assumption that the aircraft is in a certain condition based on data within the appraiser’s database.
A physical appraisal is where an inspection of the aircraft is conducted in an extremely thorough and detailed manner. This offers an appraisal with the most up-to-date information possible.
VREF Is Your One-Stop-Shop
When you choose VREF for your valuation and appraisal services, your services are the expert opinions of professional appraisers – experts who are familiar with the industry and know the market from the ground up.
Our professional appraisers continue to enrich their own careers as they often seek out further learning opportunities to help their clients search for honest, unbiased valuations and appraisals. Contact us today for your valuation and appraisal needs.