Updated . Educational only — not tax, legal, or lending advice. Confirm figures with your CPA, the state revenue department, and a lender before you close.
A Prebuy Is How You Learn What the Advertisement Skipped
A prebuy inspection is a conditional look at one serial number, paid for by the buyer, done by a shop the seller does not control. The appraisal that caps the loan is a different report, explained on appraisals in underwriting. Do not let one document pretend to be the other.
Put this in the purchase agreement first
- Who chooses the shop, and that it is not the seller’s maintenance shop.
- Who pays. Usually the buyer. Say so.
- What “acceptable” means: airworthy, a dollar cap on discrepancies, or a right to walk.
- That logbooks, 337s, and AD lists are on site the morning the shop starts.
- Where the airplane is flown for the inspection, who flies it, and who insures that flight.
What the shop should actually open
Compression and borescope on a piston, not just a logbook “mid-time.” Corrosion in known spots for that model. Compliance with recurring airworthiness directives, with the method the AD requires, not a pencil entry. Damage history against the records, including a title search that mentions a claim the logs omit. Avionics that match the installed equipment list. For a retractable or a twin, gear and propeller details. For a turbine, the engine trend and whether a program is transferable. A test flight with a written squawk list afterward.
How the findings hit the loan
A clean prebuy does not raise the lender’s advance. A bad one can kill the appraisal, the insurance, or both. Renegotiate price or repairs before you ask the lender to pretend the contract price is still the value. Funding should wait on the signed logbook entries for anything the contract required the seller to fix. “We will fix it after closing” is how buyers inherit the invoice.
Questions buyers actually ask
Is the annual a substitute for a prebuy?
No. An annual is the owner’s airworthiness inspection. A prebuy is your chance to walk away. They can be combined only if the contract says the buyer may accept that annual and still reject the airplane.
Can the lender require their own shop?
They can require an appraisal and airworthy delivery. The prebuy shop is still your choice unless you agreed otherwise.