Frequently Asked Questions – Bidder & Seller Questions
This is my first auction, and I’m not sure how to bid.
Step 1: Register to bid by filling out a Bidder Registration form. By registering to bid, the buyer acknowledges that they have reviewed and understand the information in the bid packet and the Contract of Sale agreement. The bidder also acknowledges that immediately following the auction, they are prepared to execute the Contract of Sale agreement and pay the appropriate deposit at that time in a form that has previously been deemed acceptable to AvBid.
Step 2: Determine how much you are willing to pay for the aircraft. Since your needs and desires are unique, your evaluation of the aircraft will be different from anyone else’s.
Step 3: As the auctioneer progresses in his call for bids, simply raise your hand when you want to bid. If you’re not sure if you’re in or out, raise your hand again and the auctioneer will keep you in. He will not let you bid against yourself. The auction will be conducted under the total control of the auctioneer.
Step 4: If you have any questions, motion for one of AvBid’s auction team members. These men are here to help you understand the process completely.
Do I need to pre-qualify?
No. We normally do not require any pre-qualification to bid. However, if you intend to use bank financing, the bank will require you to qualify for their loan. The deposit you make on auction day is not contingent upon financing. For this reason, it is important that you finish your evaluation and inspections of the aircraft and be qualified by the bank as quickly as possible.
If I win the auction, what happens to my deposit money?
The deposit will count as a credit towards the purchase price of the aircraft and be placed in an escrow account until closing, which will be within ten (10) days of the auction date.
What is a buyer’s premium?
A buyer’s premium is a percentage that is added to the bid price to determine the total purchase price. In most auctions there will be a 5% buyer’s premium added to the successful bid amount on piston aircraft to create the total purchase price.
How much money do I need at the auction?
If you are the winning bidder, your ten percent (10%) earnest money deposit will be due on the date of auction. In most cases a $2,500 credit card or cash payment and a personal or business check to make a total deposit of ten percent (10%) is sufficient, however, it is best to check with our office to make certain that certified funds are not required. The balance of the contract purchase price shall be due at closing, which is ten (10) business days after the initial deposit.
What does the term “absolute” mean?
In an absolute auction, the property will be sold to the last and highest bidder regardless of price.
Are auction sales contingent on inspection?
All sales are on an “as-is” basis. There are no warranties as to the condition and/or the fitness of the aircraft for a particular use. We do our very best to provide ample documentation about the auction aircraft, but AvBid Aircraft Auctions encourages all buyers to do their due diligence and a pre-buy inspection, including examination of all log books, prior to sale day for their own protection.
When can I inspect the aircraft?
AvBid schedules previews on most aircraft at least 24 hour prior to the auction date and will make every effort to afford ample access to assist in your purchase decision. AvBid can provide access to licensed Airframe and Aircraft Engine mechanics to aid in you pre-purchase inspection
What are the advantages to a buyer in an auction situation?
At an Avbid Aircraft auction, the buyer knows the seller is fully committed to sell. Our auction agreements obligate the seller to transfer title to the highest bidder in an absolute auction. Our buyer knows he is getting the aircraft at a fair price. A buyer feels committed to the purchase knowing that there is a contending bid just one increment under the purchase price. A buyer can withdraw from the bidding at any time prior to the final gavel. Our buyer sees many offerings in the same place at the same time, which enables him to make market comparisons quickly and easily.
Other benefits are:
- Buyers set their own purchase price.
- Auctions eliminate long back and forth negotiation periods.
- Auctions reduce time needed to purchase an aircraft.
- Buyers do not have to worry about contingencies because purchasing and closing dates are known in advance of the sale.
- Buyers can receive favorable pre-sale financing.
- Due diligence is performed in advance of the sale.
I’ve never been to an auction before. This sounds confusing.
First, you are not alone. Many people who attend our Aircraft Auctions are there for the first time. Second, you will never be tricked into buying something that you don’t want. The most important thing to do at an auction is relax and have fun. If you have a question, ask it. We strive to insure that all of our customers are fully informed and educated.
What Are The Advantages To A Seller In An AvBid Auction ?
- Affiliation With SUN ‘n FUN®
- Immediate Results
- Eliminates Holding Costs
- Control Of Terms
- Creates Urgency
- Intense Specific Marketing
Affiliation With SUN ‘n FUN®
AvBid Aircrafts Auctions is partnered with SUN ‘n FUN® one of the world’s top rated aviation events. Boasting annual attendance in the hundreds of thousands. SUN ‘n FUN® is located in Lakeland Florida at Lakeland Linder Regional Airport (KLAL). The event is host to the countries 2nd largest aviation trade show, daily air shows, seminars, exhibits and so much more. This year at SUN ‘n FUN attendees will be entertained by the Black Diamond Jet Team. Known as the “Spring Break for Pilots and Friends,” SUN ‘n FUN® provides a spectacular venue to sell your aircraft.
Imagine allowing the seller to set the timetable… and close on his aircraft in 10 business days!
By using the auction method of marketing, the seller is able to sell and close his aircraft in approximately 10 business days, rather than relying upon the ambiguity of the traditional aircraft market. An auction allows the seller to establish the timeline. Knowing a specific, definite closing date allows the seller to take advantage of opportunities for reinvestment immediately.
Eliminates Holding Costs
An auction reduces the holding costs of the aircraft, including interest, taxes and maintenance. Due to the shortened marketing period of the auction, these costs terminate quickly. Traditional sales methods can leave the seller responsible for these costs for an indefinite period.
Control Of Terms
Additionally, the terms and conditions of the sale are established and controlled by the seller. Each sale is tailored to suit the individual seller’s needs and is carefully evaluated to determine the most appropriate (and cost effective) method of offering the aircraft to obtain the most money for the seller.
The auction method forces buyers to act. Traditional aircraft sales methods do not create the urgency necessary to close the sale quickly. An auction demands decisiveness and takes advantage of the synergy created when a group of buyers are bidding competitively against one another– each bid reaffirms the value of the property.
Intense Specific Marketing
As opposed to traditional marketing, in which the buyer receives offers sporadically over an extended period of time, an auction establishes a specific date by which all offers are received. With this target date in mind, an aggressive advertising campaign is designed. This campaign is created to emphasize the amenities of your aircraft, and is aviation-specific — with advertising placement in the most effective media. The goal of our advertising campaign is to ensure that all potential buyers are targeted and aware of the sale.
I have aircraft to sell, what expenses am I responsible for?
A minimal entry fee is due upon registration. Additionally, there is a commission fee due upon sale of the aircraft.
What are the benefits of selling aircraft at auction?
An AvBid Aircraft auction is a win-win proposition for everyone involved. As a seller you dispose of your aircraft quickly and efficiently, thereby saving on the long-term carrying costs such as interest, storage fees, taxes and maintenance costs.
Because the auctions are conducted publicly, both buyers and sellers have the assurance of viewing the aircraft’s value emerges as the bidding process progresses. An auction creates competition among buyers and exposes the aircraft to a vast number of qualified prospects. Because AvBid’s auctions are accelerated sales, aircraft are often sold in less than 10 days from the time of the auction. For aircraft brokers, auctions can mean an increased client and customer base as well as increased income.
What factors determine the success of an auction?
1. Foremost is the price of the aircraft being offered for sale. Which is determined by the type of aircraft, hours, condition, proper logbooks and competing similar aircraft.
2. An aggressive marketing and advertising plan designed by AvBid which is geared toward prospective purchasers and drives them to the sale.
3. Realistic expectations on the part of the seller.
4. Choosing the type of auction that best fits the aircraft and the seller’s needs. An absolute auction will bring more bidders than a reserve auction.
5. Conducting the auction in a professional manner and following up through closing.
6. Assisting buyers in performing due diligence and access to pre-buy inspections before the sale so that they are educated and the only issue that remains is price.
Are all aircraft suitable for auction?
All aircraft are great candidates for auction. This includes single engine, multi-engine, turboprop, turbine, antique, light sport, home built, corporate jets, and rotor aircraft. All are sold at AvBid auctions.
Don’t auctions depress aircraft values?
Not at all, aircraft auctions reveal the real market value of an aircraft. Because auctions are conducted in a public format where all bids are known, participants are given immediate snapshot on the aircraft’s value. At auction, values settle at the level the market can bear, neither elevated nor deflated.
Who usually buys at an AvBid auction?
Anyone can benefit from buying at a AvBid Aircraft auction. First-time buyers, corporations, government agencies, pilots, mechanics and many others buy at auction.
How are aircraft usually advertised for auction?
One of the essential elements for a successful auction is an aggressive marketing program.
Each AvBid auction has its own powerful promotion and advertising program. The program is designed by the staff at AvBid, in conjunction with the marketing professionals at SUN ‘n FUN®. Advertising is customized to fit each auction.
The advertising budget is determined according to specific aircraft attributes and the type of buyer that needs to be reached. That budget is then broken down into different forms of advertising that will best target the buyer for the sale.
The various forms of advertising are: sale bills or posters posted in FBOs , airports and public places, brochures mailed directly to prospective buyers, newspaper and aviation trade publications, as well as advertising in local, regional and international aviation publications, ads in financial trade journals and magazines, Internet web sites, email blasts, Google, Facebook and many more.
AvBid’s staff of award winning graphic artists and media buyers know which forms of advertising are best suited for a particular type of auction and aircraft.
AvBid will facilitate everything from preparing advertisements to placing them in the desired media. This hard-hitting advertising targets large groups of buyers that will participate and competitively bid on the aircraft thereby yielding true market value for its seller.