Final Pre-Flight: Your Ultimate Aircraft Pre-Closing Checklist

Successful aircraft closing process execution begins weeks before the actual closing date. Thorough preparation prevents last-minute complications, delays, and potential deal failures.

Pre-Closing Timeline Overview

Typical aircraft closing timeline from contract acceptance to ownership transfer:

  • Days 1-7: Purchase agreement execution, earnest money deposit, financing application submission
  • Days 7-21: Pre-purchase inspection, title search, financing underwriting, insurance quotes
  • Days 21-30: Inspection negotiations, financing approval, title issue resolution, insurance binding
  • Days 30-45: Final document preparation, escrow setup, closing coordination, fund transfers
  • Day 45: Closing day—document execution, fund disbursement, ownership transfer

Complex transactions or financing challenges may extend timelines to 60-90 days. Cash purchases typically close faster (30-45 days).

Essential Pre-Closing Tasks

Complete these critical tasks before closing day:

  • Financing Approval: Obtain final loan approval with commitment letter specifying terms, conditions, and closing requirements
  • Insurance Binding: Secure insurance coverage effective at closing with lender named as loss payee and additional insured
  • Title Search Completion: Professional title search confirming clear title, no liens, and proper ownership chain
  • Pre-Purchase Inspection: Comprehensive inspection completed with all issues resolved or negotiated
  • Escrow Account Setup: Escrow agent selected, escrow agreement executed, earnest money deposited
  • Document Review: All closing documents reviewed by aviation attorney before signing
  • Fund Preparation: Down payment and closing costs available in readily accessible accounts
  • Logbook Review: Final review of aircraft logbooks confirming all entries current and accurate

Assembling Your Closing Team

Successful closings require coordinated professional team:

  • Aviation Attorney: Reviews documents, protects legal interests, advises on contract terms
  • Escrow Agent: Holds funds and documents, coordinates closing, ensures proper sequencing
  • Title Company: Conducts title search, issues title insurance, files FAA documents
  • Lender Representative: Coordinates financing documents, fund disbursement, lien recording
  • Insurance Agent: Binds coverage, provides certificates, coordinates lender requirements
  • Aircraft Broker (if applicable): Coordinates between parties, manages timeline, facilitates communication
  • A&P Mechanic: Available for final inspection questions or last-minute issues

Need help coordinating your aircraft closing? Our team works with experienced closing professionals to ensure smooth transactions. Contact us today for expert guidance.

Pre-Closing Document Checklist

Gather and review these documents before closing:

  • Purchase Agreement: Signed contract with all amendments and addenda
  • Loan Commitment Letter: Lender's final approval with terms and conditions
  • Title Search Report: Professional title search results and title insurance commitment
  • Pre-Purchase Inspection Report: Complete inspection findings and resolution documentation
  • Aircraft Logbooks: Airframe, engine, propeller logs with all entries reviewed
  • Maintenance Records: Complete maintenance history, AD compliance, STCs
  • Insurance Binder: Proof of insurance effective at closing
  • Wire Transfer Instructions: Verified instructions for all fund transfers
  • Identification: Government-issued ID for all parties signing documents

Common Pre-Closing Issues and Solutions

Anticipate and address these frequent complications:

  • Title Issues: Unreleased liens, name discrepancies, missing documents—resolve with seller before closing
  • Financing Delays: Additional documentation requests, appraisal issues—maintain communication with lender
  • Insurance Challenges: Pilot qualification issues, coverage gaps—work with specialized aviation insurance brokers
  • Inspection Findings: Unexpected maintenance needs—negotiate repairs or price adjustments
  • Seller Delays: Slow document production—establish firm deadlines in purchase agreement

For comprehensive purchase agreement guidance, see our aircraft purchase agreement guide.

Closing Day Demystified: From Final Funds to FAA Filing

Understanding the aircraft closing checklist and sequence of events on closing day prevents confusion and ensures all parties fulfill their obligations properly.

Closing Day Timeline

Typical closing day sequence for financed aircraft purchases:

  • Morning (8:00 AM - 10:00 AM): Final document review, wire transfer initiation, insurance confirmation
  • Mid-Morning (10:00 AM - 12:00 PM): Document execution by all parties, notarization, escrow agent verification
  • Midday (12:00 PM - 2:00 PM): Fund transfer confirmation, lien payoff processing, title clearance verification
  • Afternoon (2:00 PM - 4:00 PM): Final fund disbursement, document recording with FAA, key and logbook transfer
  • Late Afternoon (4:00 PM - 5:00 PM): Closing confirmation, temporary registration issuance, aircraft delivery

Remote closings (increasingly common) may span multiple days as documents are shipped, executed, and returned.

Key Closing Documents

These critical documents must be executed at closing:

  • FAA Bill of Sale (AC Form 8050-2): Transfers ownership from seller to buyer; must be notarized; includes purchase price
  • Aircraft Registration Application (AC Form 8050-1): Buyer's application to register aircraft in their name
  • Security Agreement (AC Form 8050-98): Lender's security interest in aircraft; filed with FAA
  • Promissory Note: Buyer's promise to repay loan with specified terms
  • Loan Agreement: Comprehensive financing terms, conditions, and obligations
  • Personal Guarantee: Individual guarantee of loan obligations (if required)
  • Lien Release (AC Form 8050-41): Release of any existing liens from seller's lender
  • Closing Statement: Itemized accounting of all funds, credits, and debits

Fund Flow and Disbursement

Understanding financing a corporate jet fund flow prevents confusion:

  • Buyer's Down Payment: Wired to escrow account (typically 20-30% of purchase price)
  • Lender's Loan Proceeds: Wired to escrow account (remaining purchase price plus closing costs)
  • Seller's Lien Payoff: Escrow agent pays off seller's existing loan and obtains lien release
  • Seller's Net Proceeds: Purchase price minus lien payoff, broker commissions, and seller's closing costs
  • Service Provider Payments: Escrow agent, title company, attorneys paid from escrow
  • Buyer's Closing Costs: Paid from buyer's funds or loan proceeds per agreement

Example fund flow for $500,000 aircraft purchase:

  • Buyer's down payment: $100,000
  • Lender's loan proceeds: $400,000
  • Total funds in escrow: $500,000
  • Seller's lien payoff: $250,000
  • Seller's net proceeds: $235,000 (after $15,000 broker commission and closing costs)
  • Closing costs: $15,000 (split between parties per agreement)

Document Execution Procedures

Proper document execution is critical for valid closing:

  • Signature Requirements: All parties must sign exactly as their names appear on legal documents
  • Notarization: Bill of sale and certain other documents require notarization
  • Corporate Authority: Corporate officers must provide board resolutions authorizing transaction
  • Witness Requirements: Some documents require witness signatures
  • Original Documents: FAA requires original signatures on registration documents (no copies or electronic signatures)
  • Multiple Copies: Execute multiple originals for all parties' records

FAA Registration Process

Understanding FAA bill of sale requirements ensures proper registration:

  • Document Submission: Escrow agent or title company submits documents to FAA Registry in Oklahoma City
  • Required Documents: Bill of sale, registration application, evidence of ownership, $5 registration fee
  • Temporary Registration: Buyer receives temporary registration valid 120 days
  • Permanent Registration: FAA processes documents and issues permanent registration certificate (4-8 weeks)
  • Lien Recording: Lender's security agreement recorded with FAA establishing first position lien
  • Priority: Documents recorded in order received; timing critical for lien priority

Insurance Activation

Insurance must be active before aircraft delivery:

  • Effective Date/Time: Coverage effective at exact closing time
  • Named Insureds: Buyer and lender properly named on policy
  • Coverage Verification: Lender receives certificate of insurance before funding
  • Premium Payment: First premium paid before coverage binds
  • Pilot Approval: All pilots approved by insurance company before flying

The Power Players & Paperwork: Navigating Your Aircraft Purchase Agreement

Understanding the aircraft purchase agreement explained and the roles of various parties ensures smooth closing coordination and prevents misunderstandings.

The Escrow Agent's Critical Role

Aircraft escrow services provide neutral third-party coordination:

  • Fund Custody: Holds buyer's deposit and closing funds until all conditions satisfied
  • Document Coordination: Collects, reviews, and distributes all closing documents
  • Timing Management: Ensures proper sequence of fund disbursement and document recording
  • Lien Payoff: Coordinates payoff of seller's existing liens and obtains releases
  • FAA Filing: Submits documents to FAA Registry for recording
  • Closing Statement: Prepares detailed accounting of all funds and transactions
  • Dispute Resolution: Holds funds if disputes arise until resolution

Escrow fees typically range from $1,500-$5,000 depending on transaction complexity.

Title Company Responsibilities

Title companies provide essential due diligence and insurance:

  • Title Search: Comprehensive search of FAA records, court records, and other sources
  • Title Report: Detailed report of findings including liens, ownership history, and issues
  • Title Insurance: Insurance protecting buyer and lender against title defects
  • Document Preparation: Preparation of FAA registration documents
  • Recording Services: Filing documents with FAA Registry
  • Closing Coordination: Often works with or serves as escrow agent

For detailed title guidance, see our aircraft title and liens guide.

Lender's Closing Requirements

Lenders impose specific closing conditions that must be satisfied:

  • Clear Title: Title search showing no liens except lender's first position lien
  • Insurance Verification: Certificate of insurance with lender as loss payee and additional insured
  • Appraisal: Professional appraisal supporting loan amount
  • Document Execution: All loan documents properly executed and notarized
  • FAA Registration: Aircraft registered in borrower's name
  • Security Agreement Recording: Lender's lien recorded with FAA in first position
  • Closing Protection: Title insurance or closing protection letter protecting lender

Seller's Closing Obligations

Sellers must fulfill these closing requirements:

  • Clear Title Delivery: Provide clear title free of liens and encumbrances
  • Lien Releases: Obtain releases for all existing liens
  • Logbook Delivery: Provide complete, accurate aircraft logbooks
  • Airworthiness Certificate: Deliver valid airworthiness certificate
  • Registration Certificate: Provide current registration certificate
  • Keys and Codes: Deliver all keys, access codes, and security information
  • Maintenance Records: Provide complete maintenance documentation
  • Warranties: Provide any applicable warranties or guarantees

Buyer's Closing Obligations

Buyers must satisfy these closing requirements:

  • Fund Delivery: Wire down payment and closing costs to escrow
  • Document Execution: Sign all purchase and loan documents
  • Insurance Procurement: Obtain and bind insurance coverage
  • Final Inspection: Conduct final walk-through inspection before closing
  • Registration Application: Complete and sign FAA registration application
  • Closing Cost Payment: Pay buyer's share of closing costs

Aviation Attorney's Role

Aviation attorneys provide critical legal protection:

  • Document Review: Review all closing documents before execution
  • Contract Negotiation: Negotiate purchase agreement terms protecting client interests
  • Title Review: Analyze title search results and advise on issues
  • Closing Attendance: Attend closing to ensure proper execution
  • Regulatory Compliance: Ensure transaction complies with FAA regulations
  • Dispute Resolution: Resolve any closing disputes or complications

Attorney fees typically range from $2,500-$7,500 depending on transaction complexity.

Need experienced aviation legal counsel? We work with specialized aviation attorneys nationwide. Contact us for referrals to qualified professionals.

Wheels Up: Mastering Your First 30 Days of Aircraft Ownership

The closing isn't the end—it's the beginning of aircraft ownership. The first 30 days involve critical tasks ensuring smooth operations and protecting your investment.

Immediate Post-Closing Tasks (Days 1-7)

Complete these tasks immediately after closing:

  • Verify Insurance Coverage: Confirm coverage is active and all details correct
  • Secure Aircraft: Ensure aircraft is properly secured in hangar or tie-down
  • Change Locks/Codes: Change any locks or access codes for security
  • Organize Documents: Create organized filing system for all aircraft documents
  • Notify FBO/Airport: Inform FBO and airport management of ownership change
  • Update Contact Information: Provide contact information to maintenance facilities, insurance company, lender
  • Review Logbooks: Thoroughly review all logbooks and maintenance records
  • Familiarization Flight: Conduct familiarization flight with qualified instructor if needed

First Month Administrative Tasks (Days 8-30)

Establish proper administrative systems:

  • Set Up Maintenance Tracking: Implement system for tracking maintenance due dates, inspections, ADs
  • Establish Record Keeping: Create systems for flight logs, expense tracking, maintenance records
  • Schedule Annual Inspection: If annual is due soon, schedule with preferred maintenance facility
  • Join Owner Groups: Join type-specific owner groups for support and information
  • Establish Vendor Relationships: Identify and establish relationships with mechanics, avionics shops, parts suppliers
  • Review Operating Handbook: Thoroughly review POH and operating procedures
  • Create Emergency Fund: Begin building emergency maintenance reserve fund
  • Tax Planning: Consult with tax advisor about aircraft tax implications

For emergency fund guidance, see our aircraft emergency fund planning guide.

Operational Setup

Establish operational procedures and systems:

  • Fuel Accounts: Set up fuel accounts at preferred FBOs
  • Flight Planning Tools: Subscribe to flight planning services (ForeFlight, Garmin Pilot, etc.)
  • Weather Services: Establish weather briefing procedures
  • Maintenance Scheduling: Schedule any deferred maintenance or upgrades
  • Pilot Currency: Ensure all pilots meet currency requirements
  • Emergency Procedures: Review and practice emergency procedures

Financial Management

Implement financial tracking and management:

  • Expense Tracking: Set up system for tracking all aircraft expenses
  • Budget Creation: Develop monthly and annual aircraft budget
  • Loan Payment Setup: Establish automatic loan payments
  • Reserve Funding: Begin monthly contributions to maintenance reserves
  • Tax Documentation: Implement system for tracking tax-deductible expenses
  • Insurance Review: Schedule annual insurance review date

Common First-Month Issues

Be prepared for these common new-owner challenges:

  • Unexpected Maintenance: Issues discovered during first flights—budget for surprises
  • Learning Curve: Unfamiliarity with aircraft systems—invest in training
  • Documentation Gaps: Missing or incomplete records—work to fill gaps
  • Vendor Relationships: Finding reliable maintenance providers—seek recommendations
  • Cost Surprises: Underestimated operating costs—adjust budget accordingly

Building Your Support Network

Successful aircraft ownership requires strong support network:

  • A&P Mechanic: Establish relationship with trusted mechanic
  • Avionics Shop: Identify qualified avionics technicians
  • Insurance Agent: Maintain relationship with aviation insurance specialist
  • Aviation Attorney: Keep attorney contact for future needs
  • Fellow Owners: Connect with other owners of same aircraft type
  • Flight Instructor: Maintain relationship with qualified instructor for recurrent training

Frequently Asked Questions About Aircraft Closing

How long does aircraft closing take?

Aircraft closings typically take 30-60 days from purchase agreement execution to ownership transfer. The timeline includes: financing application and approval (14-21 days), pre-purchase inspection (7-14 days), title search (7-10 days), insurance procurement (3-7 days), and final document preparation and execution (7-14 days). Cash purchases may close faster (30-45 days) since they eliminate financing approval time. Complex transactions involving multiple parties, international buyers, or title issues may extend to 90 days. Delays commonly occur due to financing complications, inspection findings requiring negotiation, title issues needing resolution, or slow document production by sellers.

What are typical aircraft closing costs?

Aircraft closing costs typically range from 2-5% of purchase price, or $10,000-$50,000 for most transactions. Common costs include: escrow fees ($1,500-$5,000), title search and insurance ($2,000-$8,000), aviation attorney fees ($2,500-$7,500), lender fees ($1,000-$5,000), appraisal ($1,000-$3,000), pre-purchase inspection ($1,500-$5,000), insurance premium (1-3% of hull value), sales tax (varies by state, 0-8%+), and FAA registration ($5). Purchase agreements typically specify which party pays each cost. Buyers usually pay financing-related costs, while sellers pay broker commissions and lien payoff costs. Negotiate cost allocation during purchase agreement negotiation.

Can aircraft closings be done remotely?

Yes, remote aircraft closings are increasingly common and work well with proper coordination. Remote closings involve: documents shipped to parties for execution and notarization, executed documents returned to escrow agent, funds wired to escrow account, escrow agent coordinates document recording and fund disbursement, and aircraft delivered after closing completion. Remote closings may take 2-3 days longer than in-person closings due to document shipping time. Use overnight shipping with tracking for all documents. Ensure all parties have access to notaries. Video conferencing can facilitate coordination and document review. Remote closings work particularly well for buyers and sellers in different states or countries.

What happens if issues are discovered during final inspection?

If issues are discovered during final pre-closing inspection, several options exist: seller repairs issues before closing (most common for minor problems), purchase price reduced to compensate for issues (buyer handles repairs post-closing), funds held in escrow for repairs (released after completion), closing delayed until repairs completed, or buyer walks away if issues are severe and seller won't address them. Purchase agreements should include inspection contingencies allowing buyers to renegotiate or terminate if significant issues are discovered. Minor issues (cosmetic problems, small discrepancies) typically don't derail closings. Major issues (airworthiness concerns, undisclosed damage, significant maintenance needs) may require substantial negotiation or deal termination. Always conduct final walk-through inspection 24-48 hours before closing.

How do I verify funds have been properly disbursed at closing?

Verify proper fund disbursement through: closing statement review (detailed accounting of all funds), wire confirmation receipts (proof of all wire transfers), lien release documentation (confirmation seller's liens paid off), escrow agent confirmation (written confirmation of disbursement completion), and bank account verification (confirm funds received if you're the seller). The escrow agent provides a final closing statement showing: all funds received (buyer's down payment, lender's loan proceeds), all disbursements (seller's proceeds, lien payoffs, service provider payments), and final accounting reconciliation. Request copies of all wire confirmations and lien releases. Verify your lender's security agreement was recorded with FAA in first position. Keep all closing documents permanently.

What documents should I receive at closing?

Buyers should receive these documents at closing: executed bill of sale (AC Form 8050-2), temporary aircraft registration (valid 120 days), copy of registration application (AC Form 8050-1), all aircraft logbooks (airframe, engine, propeller), maintenance records and documentation, airworthiness certificate, weight and balance documentation, aircraft operating handbook/POH, all keys and access codes, insurance policy or binder, loan documents (promissory note, security agreement, loan agreement), closing statement, title insurance policy, and any warranties or guarantees. Verify you receive original logbooks, not copies. Ensure all documents are properly executed and notarized. Create organized filing system for all documents. Make digital backups of all critical documents.

When can I take possession of the aircraft after closing?

Aircraft possession typically transfers immediately after closing completion, once: all documents are executed, funds are disbursed and confirmed, insurance coverage is active, temporary registration is issued, and seller delivers keys and logbooks. Some purchase agreements specify possession timing: immediate possession after closing (most common), delayed possession (seller retains aircraft for specified period), or early possession (buyer takes aircraft before closing with holdback). If taking immediate possession, conduct final walk-through inspection before accepting aircraft. Verify all agreed-upon items are included (headsets, covers, manuals, etc.). Test all systems before seller leaves. Take photos documenting aircraft condition at delivery. Obtain seller's contact information for any post-closing questions.

What if the seller's lien can't be released at closing?

If seller's lien can't be released at closing, several solutions exist: delay closing until lien release obtained (most common), hold sufficient funds in escrow to pay lien with release required before fund release to seller, seller provides indemnification and title insurance covers lien risk, or transaction terminates if lien can't be resolved. Unreleased liens are serious issues preventing clear title transfer. Lenders won't fund loans without clear title and first position lien. Title companies won't issue insurance with unreleased liens. Identify and resolve lien issues early in transaction. Obtain lien payoff statements 10-14 days before closing. Verify lien releases are prepared and ready for execution at closing. Never close without clear title unless you have explicit title insurance coverage and lender approval.

How long until I receive my permanent aircraft registration?

Permanent aircraft registration typically arrives 4-8 weeks after closing, though processing times vary. The process involves: escrow agent submits documents to FAA Registry in Oklahoma City, FAA processes documents in order received (first-in, first-out), FAA issues permanent registration certificate, and certificate mailed to registered owner's address. You receive temporary registration at closing valid for 120 days, allowing legal operation while permanent registration processes. If permanent registration doesn't arrive within 90 days, contact FAA Registry to check status. Ensure your mailing address is correct on registration application. Keep temporary registration in aircraft until permanent registration arrives. Some title companies offer expedited FAA filing services for faster processing.

What should I do if I discover problems after closing?

If problems are discovered after closing, options depend on problem nature and purchase agreement terms: review purchase agreement for seller warranties and representations, contact seller to discuss issues and potential resolution, consult with aviation attorney about legal remedies, file insurance claim if issues are insured events, or pursue legal action if seller misrepresented aircraft condition. Common post-closing issues include: undisclosed maintenance needs, logbook discrepancies, airworthiness concerns, or equipment malfunctions. Purchase agreements typically include "as-is" clauses limiting post-closing recourse, but sellers remain liable for fraud or material misrepresentations. Document all issues thoroughly with photos and mechanic reports. Act quickly—most legal claims have time limitations. Prevention is best: conduct thorough pre-purchase inspections and due diligence before closing.

Navigate Your Aircraft Closing with Confidence

Aircraft closings involve complex coordination, extensive documentation, and strict timing requirements. Don't navigate this critical process without experienced professional guidance.

Contact JakenAviation today for comprehensive closing coordination services. We work with experienced escrow agents, title companies, aviation attorneys, and lenders to ensure smooth, successful aircraft transactions.

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