Buyers trust the agent to identify and properly price the best aircraft for their mission, and sellers trust the agent to optimally set its value. Finding a representative that warrants that trust couldn’t be more important than it is today, when a shortage of late-model and clean legacy airframes confronts buyers, even as residual values stabilize, recalibrating the market on the sell side—and anyone, regardless of qualifications, can set up a website and offer representation.

“Twenty years ago, there were 200 to 300 actual brokers,” said Steve Gade, v-p of aircraft sales and marketing communications at Duncan Aviation, headquartered in Lincoln, Nebraska. “Today, that number is probably well over 1,000, and many of them have limited experience, knowledge, or financial and technical resources to resolve errors and omissions.”

But what are the foundations, the standards of integrity, and capabilities that warrant a customer’s trust? We spoke with Mesinger and Gade—whose firms have decades-long histories of success and reputations for rectitude—to discuss how they conduct business. Their comments shed light on the practices that buyers and sellers should look for when seeking a broker worthy of their trust.

Mining the Inventory for Hidden Gems

On the buy side, aircraft sourcing is a fundamental skill, especially given the current dearth of the most desirable, in-demand airframes. Among top brokers, sourcing seems elevated from a fundamental skill to a consuming dedication.

“Gems are harder to find but they are out there,” said Gade.

Agreed Mesinger, “You want to find that gem that checks all or most of the criteria boxes you set—the pedigree, the maintenance history, ownership, location, the records—and be able to declare you found the needle in the haystack.”

Well-earned trust makes that success possible. “The better those of us doing this for a living are, the more willing we are to wait and keep clients motivated to wait with us,” Mesinger said.

Such sourcing capabilities mandate global reach and transactional expertise, as “high-value opportunities may be overseas,” said Gade, citing as an example the recent acquisition of a Middle East–based Falcon 2000LX—a time-critical transaction. “It was key that we had resources available and that those resources shared our sense of urgency,” he said. “We sent one of our Falcon tech reps to evaluate the aircraft and relied on our international compliance officer to assist with proper import and export.”

As the example suggests, successful transactions have many moving parts, and the representative must not only have them accessible but marshal and lead them.

“We think of ourselves as conductors in a symphony,” said Mesinger. “We don’t play every instrument, but we make sure the music flows and goes together in the right key and ends on the right note for the customer.”

Members of the transactional ensemble, whether in-house or outsourced allies, include budget modelers and mission profilers, type-specific maintenance experts, appraisers, title companies, escrow agents, and the client’s legal team and aviation attorney.

First-time buyers typically also need guidance on post-purchase aircraft ownership, while seasoned purchasers may need help transitioning to a larger airframe. Such services are standard with quality brokerages and begin with identifying the aircraft best suited for the intended mission.

As part of its research, Mesinger analyzes buyers’ needs and desires, runs sample flight plans, and compares capital, fixed, and variable costs.

Gade noted that when clients come in with firm ideas about the aircraft they intend to purchase, Duncan Aviation’s research finds a superior alternative that causes them to reconsider their choice in about 30 percent of cases. “Either way,” he said, “100 percent of the time after that process they are all in without any second thoughts, which significantly speeds up the process.” Trust strikes again.

Optimizing Value and Reducing Sales Time

Gaining the trust of sellers may be more challenging than earning a buyer’s faith. “Many sellers think or hope, their aircraft is worth more than it is,” said Gade. “A well-researched market value analysis takes the emotion out of it.” Quality brokers go beyond data found in publicly available valuation guides to accurately price aircraft—on either side of the transaction.

Mesinger’s research includes daily calls to track market-specific inventory levels, aircraft-specific details and histories, and actual prices paid and factors influencing the sale. Such data is “a crucial differentiator made possible through trusted global relationships with our industry peers,” said Mesinger.

Proper pricing is critical to reducing time on market, the most crucial element of selling an airplane, without undervaluing the asset. Each day an aircraft remains unsold costs money and reduces value, Mesinger noted. “From 2017 to 2019, our average days on the market, from listing to an accepted LOI, has been 56 days.”

The technical expertise that quality brokerages leverage on the buy side can be crucial for sellers as well. Duncan Aviation, long known for its MRO services, recently represented a Citation owner during a transaction in which the prepurchase inspection was performed at the prospective buyer’s facility of choice, as is customary.

“After the acceptance flight, there were squawks that the repair station troubleshot but could not resolve,” Gade recalled. “Rather than throw parts and labor at the problem, we called our technical team. They walked the repair station representatives through the system and within 15 minutes the cause was identified, saving our client tens of thousands of dollars in possible repair costs—and the possibility that the buyer would walk out on the deal,” Gade concluded. “The closing took place the very next day.

Among the good news for sellers are signs of pricing stability. But misrepresentation of information may be a bigger problem for some sellers than residual-value issues, according to Mesinger. “It’s usually not malicious—they don’t know what they have to sell,” he said. “They never updated the spec sheet. It wasn’t right when they bought it five years ago, so when they go to sell it,” they use the same, possibly incorrect information they relied upon. A quality broker will quickly discover the discrepancy and regard it as a red flag, calling all other facts presented into question, slowing if not derailing the deal in the process.

Eying the Market Ahead

Heading into 2019’s fourth-quarter stretch, the world’s largest-volume brokerages—Duncan Aviation and Mesinger among them—reported strong to record sales, though preowned transactions were down overall. But brokers can cite simple logic as one reason for their belief in the market. Along with the trust that drives transactions is the ever-powerful desire to upgrade and the realization that it can make good economic sense.

When the time to upgrade comes and you’re looking for a broker you can trust, suggested Gade, “ask them for a list of references of clients that they have done multiple deals with, and ask those clients, ‘Why?’.”

Choose wisely and “you will be rewarded as a seller, minimizing the days on market,” said Mesinger, “and buyers can find the airplane they need, pay the price deserved, and have a reasonable retention rate on the residual value.”