Selling an Aircraft

The information below explains the paperwork steps necessary in selling an aircraft. Included are tips from AOPA experts on avoiding legal entanglements and making the whole sales process run smoothly. All of this information used as a checklist is the secret to a successful sale. The checklist includes logical sections such as the bill of sale, the moment of fund transfer, aircraft transfer, registration, and general information. These sections each include the necessary steps for that section in checklist format.

General information

AOPA recommends having the purchaser arrange for a pre-purchase inspection of the aircraft. It can be as little as an hour or two of a mechanic’s time all the way to a full annual inspection signed off by a mechanic with inspection authorization.

If another person is needed to sign for a person listed on a current registration, the document authorizing that signature will be needed by the FAA. For example: executor of an estate, trustee, or heir at law. AOPA provides additional information related to aircraft ownership online.

Knowing how to properly sell an aircraft is very important. There have been countless cases where individuals selling an aircraft were unaware of certain important procedures and subsequently got tied up in a legal hairball. Following the steps outlined in this subject report can help make selling your aircraft simple and hassle free. The federal regulations that apply to selling an aircraft are outlined in this subject report, as well as additional helpful information such as selling to a buyer who is a foreign national, and N- number removal techniques.

Please call AOPA’s Pilot Information Center with questions – 800.USA.AOPA (872-2672) Monday through Friday, 8:30 to 6:00 ET

• The seller completes the “Bill of Sale,” which is FAA Form 8050-2, available for download on FAA’s web site, or from AOPA (800/872-2672), most FAA FSDO offices, or a dealer at your nearest airport). The Bill of Sale must be filled out in duplicate (two originals).
• Both originals of the Bill of Sale go to the buyer – one is paired with the registration to go to the FAA, and the buyer keeps the other. The seller should make a photocopy, if he desires to keep a record.
• Seller name(s) should be written EXACTLY as it is on the current registration. (Watch out for shortened names such as William changed to Bill, the suffix Jr. or Sr., and the middle initial.)

Moment of Fund Transfer

• The actual moment of aircraft transfer occurs when the Bill of Sale is signed. To ensure a smooth transfer:
  • The seller must assure him/herself that the payment is truly legitimate. Cash is universally acceptable, of course, although cash transactions may be risky to handle and amounts over $10,000 require your bank to report to the IRS. A certified or cashier’s check from a bank is a common mode of payment- but be aware of the occasional check scam. A safer choice would be a bank wire transfer. It is quite normal and appropriate for the seller to telephone a bank officer at either the issuing bank, or his own bank, for help in verification of funds. For example: A seller could avoid being burned by asking, on a Friday, which bank will be issuing the buyers funds for the transaction planned for a non-business Saturday! An escrow account can also simplify this process and protect both parties. You may want to use AOPA’s partner: Aircraft Title and Escrow Services provided by Aero-Space Reports to handle the transfer of funds.
  • The smart buyer (and surely his bank!) will make any purchase funds payable jointly to the registered owner or co-owners AND any lien holder. This avoids the possibility that an unscrupulous seller would take the buyer’s money and head straight for the Las Vegas gaming tables.
• If you, as the seller, are working through a broker/dealer, make sure:
  • You have a written agreement with the broker/dealer, and
  • The written agreement clearly requires that any buyer pay you directly- then you pay the dealer/broker afterward.
• Your insurance on the aircraft may terminate with the completed bill of sale transfer, depending on how your policy is written. Some policies may remain for an additional 30 days after the sale. Don’t forget to call your insurance company to let them know of the sale. Assuming you’ve been paid properly, it’s then the buyer’s responsibility to arrange coverage. The buyer can both establish and activate his new coverage by phone.
• Be careful regarding any delivery: Verify both your insurance and the buyer’s insurance if you ever consider delivery after the sale. The seller’s insurance may not be valid after a Bill of Sale has been signed. The buyer can indeed complete his own temporary registration and fly away legally.

• At transfer of the aircraft from your (the sellers) exclusive possession, and before the seller hands over the keys and Bill of Sale:
  • Remove the original aircraft registration certificate with the owner’s name on it from the aircraft. Complete the sale information on the back of that certificate and mail it to the FAA registry in Oklahoma City. Doing so protects you.
  • Remove any FCC radio station license with your name on it (if there is one).
  • Provide all logbooks and records on the aircraft (as agreed upon) to the buyer.
  • If you know the buyer is a foreign national and the N number cannot be maintained, you are required by the FARs to remove the N number (FAR 45.33). You can paint it over or strip it off, as long as it is removed.

• Form 8050-1 is now available online. After the purchaser completes the form, they should make a photocopy of it and place it in the aircraft. The photocopy of the original will serve as the temporary. This replaces the pink slip that most owners are familiar with.

Cautions:

• The applicant for registration needs to show a chain of ownership from the last registered owner of the aircraft to themselves. This can be done with one bill of sale or multiple bills of sale from one name to the next.

• Aircraft Registration (AC Form 8050-1)
• Aircraft Bill of Sale (AC Form 8050-2)
• 8050-3-  Current registration in aircraft, back filled out, signed and sent into FAA.
• Information if registering aircraft in an LLC
• Sample Aircraft Purchase/Sales Agreement
• An airworthiness certificate usually is transferred with an airplane when it is sold, but the certificate alone does not fulfill the regulatory requirement. A buyer must ensure that the airworthiness certificate is, as the regulation specifies, current.