Who Needs An Aircraft Appraisal?
Banks & Lending Instututions
Certified appraisals are recognized as the only legitimate documentation for determining the true current market value of a specific aircraft. It is an essential tool for supporting the collateral position of an aircraft loan portfolio. These Appraisals meet USPAP requirements and guidelines, the highest standard available.
Aircraft Buyers
How much should you pay for a particular aircraft being offered? Why overpay? And if your offer price is too low, the Seller may not take you seriously. Other benefits of ordering a Certified Aircraft Appraisal:
- Discover the actual condition of the airplane, maybe contrary to that stated by the seller or broker, before spending hundreds or thousands of dollars on a pre-purchase inspection, on an aircraft that was not in the expected condition from the start.
- Discover the actual airframe, engine, and propeller times. Our Certified Aircraft Appraisals include an audit of these component flight times. Often, the current log book recorded times are inaccurate.
- Verify that all log books, FAA 337 forms, STC’s, updated weight and balance, and other required records are available.
- Is there any airframe damage history evident from improperly performed repairs, or major parts replacements, that were not revealed by the Seller? Damage history, even correctly repaired and documented, can devalue the aircraft by as much as 25%.
- Understand the extent of the most recent engine overhaul, and if it was legally “0” timed at that point. Many engine overhaul records reveal that the “overhaul” did not legally zero the engine hours-so it may actually be a high time engine now.
- Discover the presence of any visual corrosion on the airframe exterior. Are there any visible fuel or oil leaks? These can be very expensive to repair. Understand the exterior paint condition. Is it peeling away, or was it applied over a dirty surface? Any lifting from improperly prepared aluminum?
- Are the windshields and side glasses clear, cracking, or crazed?
- Our Appraisers will take photos to include with the report, and help you get a better picture of the actual condition.
If your purchase includes financing from any type of lender, they may require a Certified Appraisal anyway.
An appraisal can also assist in securing aircraft insurance with adequate hull value coverage.
Aircraft Sellers
A certified appraisal provides persuasive evidence of the condition of their aircraft and helps support the seller’s asking price.
Estate Attorneys & CPAS
A certified appraisal supports the fair market value of a specific aircraft that is part of an estate or corporate balance sheet, when evaluating property distributions and tax assessments.
WHAT IS USPAP?
The Uniform Standards of Professional Appraisal Practice is published and maintained by the Appraisal Standards Board (ASB) of the Appraisal Foundation, a non-governmental entity charged by Congress with promulgating appraisal standards.
The purpose of the Uniform Standards of Professional Appraisal Practice (USPAP) is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for Appraisers.
- An Appraiser must protect the confidential nature of the Appraiser- Client relationship.
- An Appraiser must comply with USPAP when obligated by law or regulation, or by agreement with the Client or intended users.
- An Appraiser must perform assignments with impartiality, objectivity, and independence, and without accommodation of personal interests.
- An Appraiser must retain the work file (all appraisal notes, calculations, and supplemental information used in preparing the appraisal) for a period of at least five years after preparation or at least two years after final disposition of any judicial proceeding in which the Appraiser provided testimony in relation to the assignment, whichever period expires last.
OUR APPRAISAL PROCESS
First, the Appraiser will handle the assignment as CONFIDENTIAL. The appraisal report, and the value determined will be disclosed to the Client only.
The aircraft appraisal process consists of:
- A visual examination of the aircraft-airframe inside (where accessible) and out, engines, propellers, instrumentation, avionics, and installed systems.
- Inventory of all instrumentation, avionics, and installed systems.
- Careful review of aircraft documentation, log books, and associated records.
- Calculation of the airframe, engine, propeller, and other relative component times.
- Computer analysis of relevant value data
- A thorough, minimum ten page detailed report and narrative explaining the findings of the above.
- A CONFIDENTIAL detailed report, including high resolution photographs, submitted to the Client
- Sealed Certificate of Appraisal.
The process of developing an appraisal is intricate. Due to the inexperience of many brokers and dealers, and the pressure to obtain a certain “number”, high values are far more common than low values. Whether you are a Buyer, Seller, Insurance Company Professional, or an Estate Executor, you have a major stake in ensuring that the stated value for an aircraft is reflective of today’s market.
OUR COVERAGE AREA
MiamiJet performs aircraft appraisals anywhere in the world. Clients needing appraisals between Virginia and Florida have all travel costs waived! Our Certified Aircraft Appraisers are stationed in the United States, Europe, South Africa, Asia, and Australia, and are available to travel as necessary to work in any other region. Call or email us for a quote and availability. If you need the appraisal started quickly, just let us know. Often we can start our inspection the following business day.
A MORE ACCURATE APPRAISAL
what your aircraft is actually worth
Aircraft Buyers are interested in Market Value, or Fair Market Value.
Banks need to know Fair Market Value, and sometimes Orderly Liquidation Value.
Insurance companies often require an appraisal to determine Diminution in Value.
An aircraft appraisal should not be just a fancy report filled with photos, statistics, and narratives, with a resultant value requested by the Client, nor should the appraisal target value be the amount of the bank loan. An aircraft appraisal derived from a valuation software is not worth its weight either.
The definition of Fair Market Value is the price that a willing buyer will pay a willing seller for an asset, while having a reasonable knowledge of pertinent facts, and neither party acting under any compulsion to do business.
MEET OUR SENIOR CERTIFIED AIRCRAFT APPRAISERS
Greg Hermans
President
Senior Certified Aircraft Appraiser-Professional Aircraft Appraisers Organization
Senior Certified Aircraft Appraiser-National Aircraft Appraisals Association
Accredited Buyer’s Agent
Appraised and valued over 600 aircraft.
Personal involvement with over 400 aircraft purchases.
Built and maintains a database of aircraft sales prices.
Certified Pilot-Commercial-Instrument-Multi Engine-Turbine
Education – Engineering Background in Nuclear Power
Phone: 305-894-9344
Fax: 757-724-6047
Email: Greg@MiamiJet.net
As mentioned in our appraiser credentials, our appraisers each possess a high level of aircraft appraisal credentials. However, what is unique in our product is our involvement in aircraft sales, almost daily. Not only do we calculate aircraft values using market data, statistics, and professional program software, but we are able to experience first hand what buyers will actually pay for an aircraft. So, when it comes time to sell the subject aircraft, and the transaction is completed and closed, you can look back on our appraisal and see the accuracy we provided.
THE APPRAISAL FOUNDATION
The Appraisal Foundation (Foundation) is the nation’s foremost authority on the valuation profession. The organization sets the Congressionally authorized standards and qualifications for real estate appraisers as well as qualifications for personal property appraisers and provides voluntary guidance on recognized valuation methods and techniques for all valuation professionals. This work advances the profession by ensuring that appraisals are independent, consistent, and objective.
Headquartered in Washington, DC, the Foundation is directed by a Board of Trustees (BOT). The Foundation also ensures that the profession adapts to changing circumstances and continues to move forward through the work of its two independent boards: the Appraiser Qualifications Board (AQB) and the Appraisal Standards Board (ASB).
THE APPRAISAL FOUNDATION: BACKGROUND & HISTORY
In 1986, nine leading professional appraisal organizations in the United States and Canada formed an Ad Hoc Committee on the Uniform Standards of Professional Appraisal Practice (USPAP) in response to the crisis in the savings and loan industry. In 1987, the Committee established the Foundation to implement USPAP as the generally accepted set of appraisal standards in the United States. These organizations recognized the importance of ensuring that appraisals are based upon established, recognized standards.
In 1989, the U.S. Congress enacted the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), which authorized the Foundation as the source of appraisal standards and qualifications. The Foundation is not a membership organization but rather is composed of other organizations. Today, with Sponsoring Organizations and Advisory Councils, close to one hundred organizations, corporations and government agencies are affiliated with the Foundation.
WHAT SHOULD I ASK MY APPRAISER?
What aircraft appraisal credentials do you have?
- Outside of aircraft appraisal transactions, how often are you involved in aircraft sale transactions?
- Are your aircraft appraisals written in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP)?
- Regarding your past appraisals, did the aircraft eventually sell for the price that you determined in your appraisal?