The Breakdown on Brokers: What to Know And What To Ask When Considering A Broker

July 14, 2010 | Posted by Andrew Richmond

In my last article, May 2009, Barbers Need a License, no government oversight. Talk about I went out on a limb a bit to predict, among other things, that used aircraft prices would stabilize at realistic levels, making ownership attractive for more buyers. That’s generally proved to be the case. In fact, as the market continues a slow but apparently steady recovery, buying an aircraft can once again be a highly rewarding experience. You can find the right aircraft at a great price — a plane that will make you more productive, transport you to more destinations, and offer newer levels of productivity and personal freedom.

However, a smooth and successful aircraft transaction is the result of a process during which a lot of things can potentially go wrong. Very wrong. This is why many companies and individuals employ an aircraft broker to manage the process for them. In this article I’ll explore the benefits and potential pitfalls of using a broker, and offer some guidance on how to find the right one for you.

Barbers Need A License, But Brokers Don’t
As a starting point, let’s make a comparison with the real estate industry, which also involves the sale and purchase of high-value assets. To get a real estate license in California, where the average home sells for around $300,000, you must take classes and pass an exam, then work for a licensed broker who will supervise your transactions. They will also take your fingerprints for good measure. And if you want to upgrade to a real estate broker’s license, you need even more training, as well as additional insurance policies to protect the consumer.

Contrast this with business aviation, where a jet can cost anywhere from about $2 million to $50 million or more. You would think that the rules would be even stricter than for real estate — yet you would be wrong. In fact, to be an aviation broker, all you need is a phone and an email address. That’s right: no training, no license, no government oversight. Talk about buyer beware!

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