Updated . Educational only — not tax, legal, or lending advice. Confirm figures with your CPA, the state revenue department, and a lender before you close.
The Appraisal Caps the Loan. The Contract Does Not.
Loan-to-value uses the appraisal the lender orders, not the number in the listing and not the number you and the seller like. How LTV is defined is on LTV and appraisals. This page is the appraisal engagement itself.
Desktop versus on-site
A desktop appraisal uses photos, logs, and published data. It is faster and it misses what a shop would see. Lenders use it on clean, common aircraft and on smaller loans. An on-site appraisal, often paired with a prebuy, is what you want when the aircraft is old, modified, or damaged-history. You may pay for both the prebuy and the appraisal. They are not the same report. The prebuy tells you what is broken. The appraisal tells the lender what it is worth assuming those findings.
Who the appraiser works for
The lender’s appraiser works for the lender. A letter your broker ordered from a friendly dealer is not a substitute unless the lender agrees to accept it. Ask before you spend the money twice.
When it comes in low
If the lender advances 80% of appraised value and the appraisal is below the contract, the gap is cash at closing, a price cut, or a dead deal. Renegotiate using the report. Do not ask the lender to “use the contract price just this once.” That is the entire point of ordering the appraisal. Build the gap into your offer by leaving room in the deposit and by running the lower loan amount through the calculator before you fall in love with the paint.
Questions buyers actually ask
Can I challenge an appraisal?
You can submit comps and corrections of fact (wrong time, missed equipment that is in the logs). You cannot argue that you need a higher number to make the deal work.
Does a prebuy replace the appraisal?
No. One is a condition inspection. The other is a value opinion for the lender. Do both when the aircraft deserves both.