Dream Wacos Collection

Pilots are uncommonly attached to their airplanes.  Like some boat owners many refer to them in the feminine gender and anthropomorphism is common.  This is understandable in a traditional sense of the aircraft as a “ship” in antiquated parlance and because pilots are generally passionate about aviation and the unique conveyances that lift them skyward. 

It’s also a handicap when it comes time to part with their treasure.  Admittedly, it’s hard to put a price on something we are attached to.  Our vision is blurred and our reason sometimes a bit off kilter due to our emotional bond or our pride of ownership.  These are among the reasons that we often see antique airplanes for sale for what are frankly unrealistic prices.   And often it’s also the case that the proud owner’s market judgement is flawed by one of several other things:

1. Believing it’s worth what we paid for it.  In a rational sense, of course, we realize that markets are dynamic, and things of all kinds rise and fall in value over time due to the essential facts of supply and demand (more on that in a moment).
2. Believing it’s worth what we have invested in it.  This is especially prevalent in the sale of “projects” where the owner sets out to restore a plane and for whatever reason has decided not to finish.  In the case of an incomplete professional restoration the fact is that the labor cost investment is essentially worthless as most buyers (who ultimately determine value) simply discount those expenses either with their own costs of labor (free) or the tried-and-true replacement analysis wherein one looks at similar items which have those costs reduced or eliminated.  Other things sellers often overlook is that, despite rarity, older airplanes, and older restorations of older airplanes, have wear and tear that reduces desirability and reduces value.  I often say that people who have cats don’t realize their houses smell.  In the same way someone who has owned an airplane for a long time just doesn’t see its time and use induced flaws.
3. Believing it has value because it’s “rare”.  I see this all the time, and like a Siren’s song it appeals to me too.  But the truth is that rarity is relative.  And that relativity affects market value.  Part of the relativity equation is that often an antique is rare because it didn’t have much value when it was new compared to other planes which is why it didn’t sell well in the beginning.  Sometimes this is because it didn’t (and doesn’t) fly well, other times because it’s funny looking but usually simply because there were better airplanes then and the survivors are better now.  I do think rarity can add value but its usually not what the seller, with an unsold airplane languishing in the hangar thinks – especially when balanced against condition, restoration quality and the fact that most buyers want things they’ve heard of not things they haven’t.
4. Believing there are lots of buyers for antiques because there used to be and time on the market will mean a sale at what they think the plane is worth.  This is clearly fantasy as there are demonstrably fewer people interested in general aviation than there used to be in general and fewer interested in the care of cantankerous old airplanes specifically.  When the market shrinks, essential economic theory tells us, so does value.  Even a rare aircraft is oversupplied to the market when there are few or no buyers. 
5. Believing its worth what a spouse said it was.  Unfortunately, many pilot aircraft owners don’t dispose of their treasures while they are still with us, leaving their heirs to figure out what to do.  When this happens the heir, with no knowledge of anything having to do with the antique market, falls back on what their dearly departed told them it was worth.  And, when we’re honest, we all know that we tend to exaggerate in this area as we attempt to justify the lavish amounts of money we dump into our planes. 
6. Believing an airplane or project is worth more than the sum of its parts.  In fact, almost always the breakup value of a project or plane has more value than the whole. 

There are other issues that affect market misjudgment with antiques.  One of the most prevalent is not understanding the cost of restoration.  To take a pile of parts and make an airplane today requires a lot of money or huge amounts of personal time and skill.  The latter, skill, simply isn’t as abundant as it once was as very few people earn their livings with their hands anymore.  And it’s clear that disposable time has much more demands on it than it once did.  So, the individual capability to restore something just doesn’t exist in the quantity it once did, and this dramatically affects value.  If you don’t have time or skill and want to restore an airplane you need a skilled professional and there simply aren’t very many of them anymore.  So, selling a pile of parts and a dream of completion faces the hard reality that buyers see the problems and don’t want a nightmare. 

So, sellers advertise their piles of parts or their pride and joy and sit and watch their ads grow old with puzzlement and incomprehension.  A friend said to me many years ago that “the only reason something doesn’t sell is price” and he is absolutely right.  When the price is right, and the object is properly exposed to the marketplace it sells quickly.  I’ve seen planes sell in under an hour and others sit on “Barnstormers” year after year.  It makes you wonder if the seller simply doesn’t understand market forces or is waiting for a fool. 

The truth in all of this is there aren’t many buyers anymore.  For some airplanes there may only be one or two or perhaps a handful.  This reminds me of the wisdom of a real estate agent many years ago who said, “usually your first offer is your best” and while you may bring it up some, leaving things on the market tends to actually depress their value as potential buyers begin to believe something’s wrong. 

Despite all of the reasons not to buy antiques: they are wasting assets going down not up in value, they are expensive to restore and maintain, there are fewer buyers all the time making value loss inevitable and so on, I keep buying them anyway.  But while I may be foolish, I’m not a fool, and won’t buy something that is priced higher than the current market will bear.  So, I watch beautiful planes, and interesting projects, sit in hangars depreciating and being unappreciated, until their owners either give up or get realistic.  This does happen all the time where someone drops their price once or over time and then — Boom!  It sells. 

Now that the thing has sold the seller has had some success.  But they’ve also had a lot of costs.  During all that time the plane had to be maintained, stored, and insured which reduced what the seller really got.  And the hidden cost that none of us like to think about slowly eroded value and that’s the cost of owning an asset that isn’t producing income (even if your money is in a CD at least it’s increasing). 

I bought an airplane this week that the seller had listed less than 24 hours because she had it priced right.  I’ve bought airplanes a year after making an offer when the seller finally figured out my offer was fair, or even generous.  I’ve watched other planes just sit. 

So, here’s my advice:

1. Be realistic.  Look at what things are really selling for when you set a price.
2. Related to #1 though is that it can be hard to establish a value on something that there aren’t many of.  My advice here is to not look with derision at any offer.  “Serious offers only” and “No tire kickers” may make you feel like you won’t be wasting your time, but they are off putting, even to serious, legitimate buyers.  And “no low-ball offers” just means that if you’re overpriced you aren’t going to learn much from people who may love your plane but have a different idea of value.  I’ve moved my offers up after discussion and walked away from nice planes just because the seller was not worth dealing with.
3. Understand there aren’t many real buyers (in absolute terms and also that can write a check instead of asking for time to scrounge money they may never find) and when you are talking to one try to find common ground and make a deal.  It may be a long time, and a lot less money, before you find the next one.
4. Be prepared.  Have scans of your logs ready to send.  Know the history and have it written down.  Take high-quality, high-resolution photos and be ready to send them (or have in Dropbox which is even better).  Take photos of the flaws as well as the finer points.  A broker friend of mine, who has a flawless reputation, takes detailed photos of everything.  I’d be happy to buy a plane anytime from him sight unseen.  Be like that.
5. Be Honest.  This summer I spent 5 hours in a fast airplane, and a fair amount of money, to go see an airplane that wasn’t what it was represented to be.  Pictures lie but sellers shouldn’t.  Be completely truthful.  Tell the prospect about your airplane’s flaws as well as its virtues.  He, or she, is going to find out eventually.  But when I find undisclosed flaws that the seller knew about, or should have known about, I start deducting from my offer the things I didn’t discover because trust is gone.  Or I simply walk away from a plane I might have bought if the seller was transparent.
6. Be available.  Respond quickly to inquiries.  Answer email the day you get it.  Respond to texts.  Answer your phone.  Don’t make it hard for a buyer to buy your plane.  I’m busy. That’s why I can buy an airplane.  If someone makes it hard for me, I just move on.  There are lots more planes and projects than I can ever buy or restore.
7. Don’t be a jackass and say things in your ad like “serious inquiries only”.  Every inquiry may be a potential offer.  When I see things like that I don’t even bother because I know the person who wrote that is going to be difficult to deal with and life’s too short for that.
8. Put a price in the ad.  Don’t make it hard for people to determine their interest or to buy your plane.   Make it easy and it will sell quickly. 
9. Name your price.  Sellers don’t want to have to guess what you want.  I know the rule that the first person to name a price loses.  But in this game the seller who insists on an offer may just not get one. 
10. Related to #9 above is be respectful and respond to all offers even if it’s not one you want to take.  Differences of opinion exist.  I recently dealt with a seller who insisted I name my offer and also asked that I give my rationale.  I spent thousands of dollars to go see this airplane and dozens of hours researching it.  I spent hours complying with the sellers’ requests.  Then I didn’t hear anything back.  I won’t go out of my way to bad mouth that person but if anyone asks me, I’ll tell of my experience.  This is a small community of people interested in these airplanes and you’ve only got one reputation.  Burnish it, don’t diminish it.
11. Clean it up.  This is so obvious I can’t believe I need to say it but time after time I go look at a plane that I guess I’m expected to have x ray vision in order to see through the dust, grime, dirt, oil, bird droppings and you name it.  It’s irritating because its not only hard to see the quality of the paint but it’s hard to believe the seller’s assurances about how well cared for the plane is when the plain truth is so obviously different.  So, give it a bath.  Give it a polish.  Clean your hangar while you’re at it so I don’t have to wonder about you, your attention to detail and your care of this treasure you’re trying to unload. 

Some of this advice may grate.  I get that.  But here’s the deal, there is a “golden rule” in economics which is that “the ones with the gold rule” and that simply means that buyers need to be respected and responded to appropriately.  

It’s often said that value is what a willing seller and willing buyer agree to in an arm’s length transaction.  Getting to agreement requires being thoughtful, knowledgeable, reasonable, respectful, responsive and willing to compromise.  If buyers and sellers approach acquiring or disposing of antique airplanes and projects like that life is pretty easy.  When they don’t these industrial works of art and instruments of infinite please gather dust and disintegrate.