An aircraft sale isn’t one negotiation — it’s a sequence of roughly ten steps, and most involve someone other than the buyer or the seller: a broker, an aviation attorney, an escrow or title company, an independent inspection facility, and at least one government registry. This is that sequence, in the order it actually happens, with the document and the money named at each step.
This covers the sales side only — for how charter brokerage differs, see IABI’s comparison of the two roles. For what training should teach, see Aircraft Sales Broker Training; for the wider career picture, How to Become an Aircraft Broker. This site is published by the International Aircraft Broker Institute (IABI, iabi.aero).
Key points
- An aircraft sale moves through a fixed sequence — engagement, valuation, letter of intent, escrow deposit, purchase agreement, inspection, title search, registration, then closing.
- Money never passes directly between buyer and seller. A neutral escrow or title company holds it and releases it only when the purchase agreement’s conditions are met.
- Most of a letter of intent is non-binding. A handful of clauses — exclusivity, confidentiality, deposit handling — usually are.
- The purchase agreement, not the letter of intent, is the contract that binds the sale, and it should be drafted or reviewed by an aviation attorney.
- US-registered aircraft go through the FAA Civil Aviation Registry under 14 CFR Part 47; many turbine aircraft also touch the International Registry under the Cape Town Convention.
- None of this is legal or tax advice, and no training course — IABI’s included — can promise a job, an income figure, or a placement outcome.
| Party | What they do |
|---|---|
| Sales broker | Represents buyer or seller, coordinates the others, paid on commission |
| Aviation attorney | Drafts or reviews the purchase agreement; advises their own client |
| Escrow / title company | Neutral third party; holds funds and documents, releases them at closing |
| Inspection facility | Independently examines the aircraft’s condition and records before closing |
1. Engagement: who the broker represents, and how they get paid
A sale usually starts with an exclusive listing agreement, giving one broker the sole right to market a specific aircraft for a defined period at an agreed commission. Representing a buyer instead runs on an acquisition agreement, the buy-side equivalent covering the search rather than the listing. (Both terms, and others below, are defined in the aircraft broker glossary.)
Either agreement should say how and when the broker is paid — almost always a commission tied to the transaction, negotiated case by case rather than fixed industry-wide. See Aircraft Broker Salary for what independently reported pay data shows, and why no single figure applies to every broker.
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2. Finding and valuing the aircraft
Once engaged, a broker checks the aircraft — or the market, if representing a buyer — against current data rather than a guess. Four services brokers commonly use, described from their own sites:
- JetNet — aviation business intelligence combining primary research with proprietary and public data on aircraft and transactions.
- AMSTAT — a research company focused exclusively on the business aviation market: fleet data, transaction history and analytics.
- VREF — an aircraft valuation and appraisal company offering valuation reports and appraisals.
- Aircraft Bluebook — a valuation data source covering current and historical aircraft market values.
These are inputs a broker interprets, not a verdict. A subscription report gives a starting range for a price conversation; it doesn’t set the price.
3. The letter of intent
A letter of intent (LOI) sets out the price and headline terms a buyer proposes and a seller accepts in principle. Most of it is deliberately non-binding — either side can still walk away before signing the purchase agreement. What typically is binding, in its own clause: an exclusivity period (the seller stops marketing to other buyers for a set window), confidentiality over deal terms and aircraft data, and how any deposit paid at this stage would be handled if the deal falls through. Because binding and non-binding provisions sit in the same document, both sides should have the LOI reviewed by an aviation attorney before signing — not by the broker, whose commission depends on the deal proceeding.
4. Deposit into escrow
Once a deposit is due — at LOI or at the purchase agreement, depending on how the deal is structured — it goes into escrow, not to the seller. A title and escrow company acts as the neutral third party: it holds the buyer’s funds, and later the balance of the price, until every closing condition in the purchase agreement is met, then releases the funds to the seller and handles the paperwork that moves title. Money passing directly between buyer and seller, without that step, removes the protection for whichever side pays first.
5. The aircraft purchase agreement
The aircraft purchase agreement (APA) is the contract that actually binds the sale — the LOI isn’t it. It sets the final price, the deposit and what happens to it on default, the buyer’s inspection rights and window to use them, the required delivery condition, and the conditions that must be satisfied before closing (clear title, a passed inspection, any registration or export step). Because the APA is what a court would enforce if the deal went wrong, it should be drafted or reviewed by an aviation attorney — not by the broker.
6. Pre-purchase inspection
Between signing the purchase agreement and closing, an independent inspection facility the buyer selects — not the seller’s own maintenance shop — examines the aircraft’s airframe, engines, and records. The buyer typically pays for this inspection, often shortened to “pre-buy” or PPI; cost varies by aircraft size, engine type and facility, and no single figure applies across the industry.
A pre-buy checks two things: whether the aircraft is airworthy (legally fit to fly, current on required inspections) and whether it meets the delivery condition the purchase agreement promised — a separate, often higher bar covering items like cosmetic condition or avionics currency. What happens to a discrepancy is a purchase-agreement question: some agreements let the buyer walk away, some require the seller to fix or credit the item, and some send it to negotiation. There’s no standard split of who pays for what an inspection finds — it’s written into the contract, or argued over.
7. Records and title
Separately from the inspection, the buyer’s team reviews the paperwork: logbooks for the airframe, engines and propellers, showing total time and cycles; confirmation that required airworthiness directives are complied with; and whether the engines are enrolled in a maintenance program covering future overhauls. A title search — usually run through the escrow/title company or a title specialist — checks the aircraft’s ownership history for recorded liens: an unpaid loan, an unpaid maintenance bill, or another claim. A lien has to be released before a buyer can take clean title; an uncleared one is one of the most common reasons a closing date slips.
8. Registration and the registries
A US-registered aircraft’s ownership record lives with the FAA Civil Aviation Registry, under 14 CFR Part 47 (Title 14, Chapter I, Subchapter C). By rule, an aircraft eligible for US registration may not be operated unless “it has been registered by its owner” (14 CFR 47.3(b)). To register one not previously registered anywhere, the new owner submits an Aircraft Registration Application, AC Form 8050-1, with an Aircraft Bill of Sale, AC Form 8050-2, signed by the seller, or other evidence of ownership the rule allows, plus a $5.00 registration fee (14 CFR 47.31(a); 47.33; 47.17).
For many turbine aircraft, the deal also touches the International Registry, the electronic registry created under the Cape Town Convention. Its own site describes it as a system where users “electronically record international interests for the purpose of establishing the priority of those interests” — used to rank competing claims, such as a lender’s security interest, separately from the FAA’s domestic record. A broker doesn’t file either registration personally; that’s usually the escrow/title company’s job.
9. Closing and delivery
At closing, the escrow company confirms every condition in the purchase agreement is met, releases the purchase funds, and processes the documents that move title: the FAA bill of sale, the registration filing, and any lien release. Delivery — where the buyer formally accepts the aircraft — is a tax question too: where an aircraft is delivered can affect what sales, use or import tax applies, and that varies by state and by country. That’s a question for a tax adviser, not the broker or this article. On closing day, the broker’s job is mostly coordination — confirming the attorney, escrow company, inspection facility and lender, if there is one, have each done their part, and that the aircraft, its logbooks and its title arrive together.
10. Where deals die
Most collapsed aircraft deals trace back to a handful of problems: damage history the seller didn’t disclose and the inspection later finds; logbooks with gaps that can’t be reconstructed, which depresses value or blocks financing; a lien nobody cleared before closing; or an inspection discrepancy neither side will pay to fix, with the purchase agreement silent on who should. None of these are exotic. They’re the reason the sequence above exists — inspection, title search and a purchase agreement with real closing conditions catch them before money changes hands, not after.
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Frequently asked questions
What’s the difference between a letter of intent and a purchase agreement?
The LOI sets out proposed price and terms and is mostly non-binding. The purchase agreement is the binding contract that governs the sale. See the glossary for both terms.
Who pays for the pre-purchase inspection?
Typically the buyer, since the buyer selects the facility and acts on what it finds. Cost varies by aircraft and facility.
Does the broker hold the deposit?
No. A neutral escrow or title company holds it, never the broker or either party.
Do I need an aviation attorney for an aircraft purchase?
Talk to one before signing the purchase agreement. It’s the binding contract, and this page isn’t legal advice.
What is the International Registry, and does every aircraft need it?
It’s the registry created under the Cape Town Convention for recording international interests in aircraft equipment, separate from a country’s domestic registry. Not every deal touches it; many turbine transactions do.
How is an aircraft sales broker actually paid?
On commission, tied to the transaction, set out in the listing or acquisition agreement rather than fixed by the industry. See Aircraft Broker Salary and IABI’s explanation of how brokers make money.