Addison: A man calls me. He's thrilled, genuinely audibly happy, because he just bought an airplane. And he closed the week before, but he didn't call me first. And that is looking like the opening scene of a horror movie, if you ask me. And he says, Jason, I got a great deal. You know, the market's hot. Everybody told me it was hot. And the broker said, if I didn't move that day, I was going to lose the plane. So I asked him three questions, just three simple ones. And after the third, there was this long silence on the line. The kind of silence where you can hear a man doing the math he doesn't want to do. And finally he says, quiet almost to himself, Should I not have done that? Hold that question. We're gonna come back to it. Welcome back to the truth about the market. I'm your host, Jason Zilberbrand. I'm president of VREF. I've appraised nearly every type of aircraft out there. My clients range from private owners to lenders, insurance companies, operators, Fortune 500 companies, law firms, government agencies, including the FAA. And I've owned aircraft, operated aircraft, bought them, sold them, financed them, and I spent decades watching how this market behaves when conditions change. So when I talk about the aircraft market, it's not theory, it's not social media commentary. And it's definitely not scraped internet data wrapped in a chart. It is, however, real world transactional experience. This podcast also has no sponsors. We have no advertisers, which means no outside influence. And that means nobody pays for my opinions. Nobody dictates my conclusions. And it's because aviation is a capital intensive market and the market punishes misinformation every single time. So here's what we're going to do today. There's a whole genre of podcasts in our world that I genuinely love. The ones where a pilot sits down and says, Let me tell you about the day I almost killed myself and exactly what I learned from it. I learned about flying from that, the accident breakdowns, the there I was stories. And the reason those work, the reason people listen on repeat, is that a good story with real stakes teaches you something a lecture never could. You don't forget it. It rewires how you behave the next time you're in the cockpit. And today, I'm borrowing that format and pointing it somewhere, nobody points it. Not at the flying, but at the deal. Because here's the truth: you can survive a hard landing. You can survive a go-around. You think you should have started 10 seconds earlier. The airplane forgives a lot more than people think. But A bad six figure, sometimes seven-figure deal, buying or selling decision, you know, that one doesn't forgive. That one follows you around for years. It shows up on your balance sheet, in your financing, at your next sale, in your insurance. See, the market has a long memory and it never sends a sympathy card. So I'm gonna tell you three stories, three real situations. Details changed, names redacted. Because some of these people are still clients, and I'm not in the business of embarrassing anybody. Certainly not a buyer or a seller. And a guy thought he was the smartest person in the room because of his taxes. I'm not here to to to embarrass them. But we do have three completely different people, three completely different mistakes they made. And underneath all three is the exact same root cause. So stay with me to the end, because once you can see that root cause, you cannot unsee it. And I promise you it will save you money for the rest of your life in this business. So let's get into it. Let me go back to the man from the cold open. The happy one. The one who didn't call me first. And let me paint you the picture because the picture is the whole lesson. He's a first time turbine buyer, stepping up, maybe out of a high performance piston, maybe out of nothing. It doesn't matter. What matters is Is he is genuinely legitimately successful in his actual business. He built something real. He's a smart guy. And that, ironically, is the beginning of the problem. Because successful people get successful by trusting their gut, moving fast, and out deciding the room. And those are fantastic instincts in the business you already understand. But they are catastrophic instincts when you're buying an airplane for the first time. The gut is a wonderful entrepreneur. The gut is a terrible aircraft appraiser. So here's the environment he's walking into. Every single thing he reads, every conversation he has is telling him the same story. Market's hot, inventory's super tight, brokers are upbeat, values are going up. Buy now or get left behind. It's in the headlines, it's in the trade press. It's coming out of every mouth at every FBO. Hot market, hot market, hot market. It becomes background radiation. He stops questioning it the way you stop hearing the air conditioner. Then he finds an airplane. And right on cue there's a wrinkle. The broker mentions kind of casually that there's another party looking at it. Maybe a vertical verbal offer is coming. I'd hate for you to miss it, he says. And something happens in his chest, that little hint of adrenaline, that fear. The same fear that makes people overpay at auctions and bid on houses they've walked through for nine minutes. And in that state, that adrenalized don't lose its state, he makes three decisions in about forty eight hours that he will regret for the next two years. One, he shortcuts the pre buy, doesn't skip it entirely, nobody's that reckless, but he lets it get compressed, lets a few things slide to keep the deal moving and keep the seller happy. Two, he paid full asking price. He didn't even try and negotiate because negotiating might cost him the airplane. Three, he closed fast, faster than anyone should ever close on the single most mechanically complex thing they will ever own. Now here's where the hot market noise was hiding him from the entire time. Tight inventory did not mean good airplanes were scarce. It meant the good airplanes had already sold. To the buyers who did their homework months earlier, and what was left on the market, including the one he was looking at, was the stuff that he had been sitting and sitting for no reason. See, the market had already voted on this airplane, and the vote was no. He just didn't read the ballot. The other buyer, the phantom second party that lit the fire under him, maybe real, maybe a tire kicker, maybe it was someone who was never going to close, maybe a little bit of sales theater. I genuinely don't know, and here's the important part, neither did he. And it changed his behavior anyway, and that's all the urgency really has to do. It doesn't have to be true. It just has to be felt. And the compressed prebuy, ⁓ the pre-buy. The squawks that a full, unhurried pre-buy would have surfaced didn't go away because he was in a hurry. Airplanes don't care about your timeline. They just waited. And they showed up in a month too. As his problem on his dime in a shop with the airplane down and the bills landing on his inbox. The money he saved by moving super fast, and the money he won by beating that so called Phantom Buyer, he handed it all back with interest to the maintenance facility, guys. So, really, what's the lesson? Write this one on the wall. Urgency is a sales tool. It is not a market condition. Let me read that again. Urgency is a sales tool. It is not a market condition. A genuinely strong market does not need to rush you. A genuinely strong market shows up in the data, in quality airplanes trading quickly, in sellers holding firm near ask because they can. That's real strength. And real strength is patient because it doesn't need you specifically. It has other buyers. The thing that needs you to move today, the thing that gets visibly nervous when you say Let me take a week and do this right. That is not the market. That is somebody's commission with a deadline attached. And the moment you can feel the difference between those two things, you have already saved yourself more money than this podcast will ever cost you, which is nothing. But you take the point. And our data at VRF suggests that days on market for quality versus stale inventory here can be three to one or ninety days versus. Almost 300 to resell. And look, this is exactly the moment to say the obvious thing, because it's the whole reason V ref exists. That man had a number in his head, the asking price, and he treated the asking price like it was the value. Those are not the same thing. They have never been the same thing. The asking price is what one motivated person hopes to get. The value is what the airplane is actually worth on this date in this market, given its specific times, its specific damage history, equipment, and logs. So before you buy, before you sell, before you sign anything, you need to get an independent valuation, not a broker's opinion. With respect to good brokers, right? And not a number scraped off a listing site and dressed up as analysis, but you need an actual defensible. appraisal of your specific airplane from people who do nothing else and who are licensed and accredited to do it. And that's what we do at VREF. That's the entire job. That's all I do every day. So if you're anywhere near a transaction right now, get the value first. I promise you, it is the cheapest insurance you will ever buy on the most expensive thing you will ever sign for. So ⁓ to VREF, go to VREF.com Get the airplane appraised, and then go make your decision with your eyes wide open. Okay. Story two. Let's switch to the other side of the table because story two is about a seller. And I want you to like this guy because I like this guy. He did almost everything right, right up until the one thing that cost him. He's owned his airplane a long time. There's a lot of you like that. Years. He's the owner you want to buy from. He cares about his plane. He's meticulous. He's organized. He loves the thing. The logs are immaculate. The maintenance was done on time and it was done right and it was done at good shops. And he didn't cut any corners. If airplanes had personalities, this one was well adjusted and it went to bed on time. And then it comes time to sell. And he does the thing almost everybody does. He reads the same coverage we all read. Values are strong, demand is up, the flagships are setting records. It's a seller's market because the brokers are upbeat. And he takes all of that optimism, that warm bath of good news, and he prices his airplane off of it, off the vibe. He anchors to the most optimistic number he has seen anywhere, the top of the top of the top of the range. And he lists high. Because hey, market's hot. Somebody'll pay for it. Why leave money on the table? And then it sits. And it sits. He gets showings. There's some interest. People come to look at it, but nobody makes an offer. Or the offers are coming in so far below his number that he's almost insulted. So he waves them off. ⁓ they don't understand what they're looking at. Weeks become a month, a month becomes three. And here's the quiet, compounding damage that he cannot see from the inside. Because nobody can see it from the inside. Every single month that airplane sits on the market, two bad things are happening at the same time. The first is obvious. Once you say it, the airplane is aging, calendar time is passing, it's burning through, it's freshness, it's getting closer to the next inspection, the next due item, the next big dollar event that a buyer is gonna have to price in. See, time is not neutral when you're selling. Time is a cost and the meter is running. The second one that really gets him, and it's pure psychology, the market is watching his airplane sit. Buyers and brokers see a listing that's been up for 90 days, 120 days, 300 days, and they don't think, what a patient seller. They think, what the hell is wrong with that airplane? Because in their experience, the good ones sell and they sell quick. The clean ones, the right priced ones, they go. So an airplane that isn't going must have a problem that they can't see yet. He has, without touching a single thing on the airplane, transformed it in the market's eyes from pristine, well-loved into one that won't sell. And that label is worth real negative money. So how does it end? It ends the way these almost always end. Eventually, he capitulates, he drops the price. And not to where he should have started, because now there's a stink on it. So he has to draw past fair market value to overcome the staleness he created. And he closes for less, a lot less, than what he would have gotten if he had simply priced it correctly on day one and let the airplane's actual quality do the talking. And here's the mechanical part underneath it. And I want this to stick. A fresh, correctly priced airplane attracts competition, multiple interested buyers, the possibility of a bidding situation. Offers at or near ask. A stale, overpriced airplane attracts lowballs. Bottom feeders, because they smell desperation and a motivated seller. See, he had the first kind of airplane. With his opening number, he turned it into the second kind. The asking price didn't just fail to get him more money, it actively cost him because it set the whole trajectory of the sale. So what's the lesson? The headline is the top of the market, your airplane is a specific airplane, right? Values are strong as a sentence about brand new flagship in somebody's press release. It is not a sentence about your 15 year old whatever, with your times and your logs and your equipment lists, and possibly your damage history. Sentiment doesn't buy your airplane. The mood of the market doesn't write you a check. A specific human being does, comparing your specific airplane with To other specific airplanes that actually traded. See, he's the one writing you the check. So you got a price to his reality, to the transactional data. And you sell faster and you'll sell it for more every single time. You price to the headline, and the headline will quietly cost you on the way out the door. Because the relationship between time on market and a final discount to ask can be over 15%, folks. All right. Story three. And this one is my favorite because the guy walks away certain that he won. He'd argue with me about it. He might be arguing with his radio right now because I'm sure he's listening. It's the fourth quarter, and in our world in Q4, there is exactly one conversation happening in every hangar, every dinner, every advisor's office. And you know what it is? Bonus depreciation. Right off a massive chunk. Sometimes effectively all of it of the airplane's cost against this year's income. The clock is ticking on the taxier, and his accountant, who is good at being an accountant and knows nothing about airplanes, sound familiar, folks, says the magic words If you're going to buy, buy before december thirty first. So watch what he's actually doing. Watch the order of operations because it's everything. He is not shopping for an airplane. He's shopping for a tax deduction. The airplane is just the vehicle that carries the tax benefit. It's almost incidental. And when that's your mindset, when the tax tail is wagging the dog, your price sensitivity goes essentially to zero. Because in his bracket, with that write off, the spreadsheet makes almost any purchase. Price work. So if he pays too much, the government's covering a huge slice of it on paper. So who cares? Sign it. Beat the deadline. He gets the deduction. It's real. And I want to be completely fair. The tax benefit is legitimate, and he genuinely captures it. In April, he is a happy man. He tells the story at dinner. Bought the JIT, wrote most of it off. It was a great year. But here's the part nobody put in the upbeat coverage. Here's the part that doesn't show up until later. He substantially overpaid. I mean, we're talking significantly. Relative to what the airplane actually was worth, he paid a tax motivated price. He didn't pay market value. Because he was a tax-driven buyer. And tax-driven buyers are the least price sensitive buyers on Earth. And two years later, when something changes, he wants a different airplane. The mission changes. Life happens. And he goes to sell. And the market looks at his airplane and feels nothing about the deduction he got. They don't care. The market could care less what his tax situation was when he bought it. You know what it does? The market values the airplane on the airplane, full stop. And the gap between what he paid and what it's worth, he eats that out of his own pocket. The deduction was real, but so was the overpayment, and they don't cancel out the way he thinks they do. And it's actually worse because just like his own loss, and this is the part that connects all three of these stories, when he overpaid, his purchase became a comp, a data point, a closed transaction, and an inflated number. And it goes into a record and makes the whole segment look stronger than it really is. So the next guy, maybe somebody like you, the buyer in story one sees the comp, hears the market's hot, and it's partly this transaction. A tax distorted deal masquerading is evidence of genuine demand. This is the exact mechanism by which a tax incentive wanders itself into the headline that says values are climbing. It's a hall of mirrors, folks. One distortion reflected until it looks like a trend. So what's the lesson? A tax driven price is not a market price. Look, bonus depreciation is a fantastic reason to do a deal when you were already going to do it. If you generally decided to buy and pulling it into this tax year captures a benefit, that's wonderful. Take it. I'm not an anti-tax strategist. I'm pro not fooling yourself though. But it is a terrible reason to overpay. And it is genuinely dangerous to treat the proof of the market as healthy because all a tax incentive really does is pull tomorrow's buyers into today. It feels like a boom while the window's open. And it leaves an air pocket on the other side. See, when everyone who is going to buy already did and early for the tax reason. And see, we have watched this exact movie before. The credits always roll the same way. Don't let the tax tail wag the airplane. And I've done a substantial amount of tax work. Substantial. And the spread between tax motivated comps and clean arm's length comps can be as high as 20%, folks. That's craziness. So three stories. Let me lay them next to each other. A buyer who let the markets hot and phantom rival talk him out of his own due diligence. A seller who priced his beautiful airplane off the headlines and watched it go stale and sell for a lot less. And a tax guy who let a deduction talk him into a price the market could never validate. Three different people, three different mistakes, one root cause, and here it is. Every one of them traded on sentiment instead of data. Sentiment is the mood. It's the headlines. It's that upbeat broker that tells you how great everything is. The warm bath of good news. The adrenaline of a phantom buyer, the dinner party certainty. Data, on the other hand, is what airplanes actually trade for, how long they actually sit on the market, what those residual value curves actually are doing. Sentiment is how the room feels. Data is what actually happened. And in a capital-intensive market, the gap between those two is measured in your dollars. Okay, now let me tell you where the worst of that sentiment comes from. Because it'll change how you read everything from here on out. I promise you it will. There is an entire genre of industry coverage built on surveys. Surveys that go out and ask the brokers, the salespeople, how they feel about the market that they sell into. And then the results get written up as if it's data, as if it's the Fed report. Brokers increasingly upbeat. I want you to really sit with how absurd that is. You are surveying the single most conflicted population you could possibly find, and then asking them to forecast their own demand. A broker who tells a survey the market is soft is talking down his own listings and scaring his own clients. And there is no broker on earth when an incentive to be bearish on a public survey. So the survey doesn't measure the market, it measures the incentive. And you already knew the incentive before anybody mailed out the questionnaire. It's a barber test. Never ask a barber whether you need a haircut. Not because barbers are dishonest. Most are perfectly honest. But because of the business they're in. Same thing here. Brokers are upbeat. They have roughly the information content of a barber recommending a haircut. It is a mood ring, and people are out here making seven-figure decisions off of a mood ring. The antidote is boring. It almost always is. Four questions. Every time. Buying or selling. One. How long are quality airplanes in this category that I'm looking at actually sitting? Not the junk, the good ones. Two, what's the real spread between asking and closing prices? Three, is the inventory that's left actually desirable? Or is it the clearance rack with the lights dimmed? Four, what is the residual value curve actually doing? Not on the hottest headline day, but the curve. If you answer those four honestly, with real data, not a vibe, you will never ever be the man on the phone going, Should I have done that? Which brings me to one thing I'd ask of you, and then I'll let you go. If you are anywhere near a transaction right now, if you're buying, selling, financing, if you're refinancing, if you're selling an estate or settling it, anything, talk to somebody before you sign, not after. Every single one of those three men called me after. After the wire had cleared, after the listening went stale, after April. And there's only so much I can do after the fact. The whole value is on the front end when the decision is still in front of you instead of behind you. That's what we're here for at V ref. Not to sell you anything. You heard the intro. Nobody pays for the opinions on this show. But if you want to clear independent, defensible read on what your airplane is actually worth and what the data actually says before you make a move. That is literally my job. Reach out. Have the conversation with me while it can still change the outcome. It's a lot cheaper than the alternative. And I think you already know that because you just heard three stories about the alternative. So let me bring it home. Three deals went sideways. And here's the thing. I want you to carry out of here. Not one of them had to. The airplanes were never the problem. The airplanes were fine. The information was the problem. Or really the willingness to substitute a feeling for a fact at the exact moment real money was on the line. That's it. That's the whole disease. And the cure is just the discipline to trust what happened over how the room feels. This is the truth about the market. And that is the truth about the market. It does not care how anyone feels. It does not read the headlines. It does not take the survey. It settles up in the transactions, in the residual values, and what people actually pay, and it punishes misinformation every time without exception, without mercy. If one of those three stories hid a little too close to home for you, you are not alone. And you are exactly who I made this podcast for. So before I let you go, one quick favor, and here is why it actually matters. Because This show takes no sponsors and no advertising. You heard me say it up at the top. Nobody pays for opinions here. That's never going to change. But that also means there's no ad budget pushing this podcast in front of new people. The only way an owner, a buyer, a lender, somebody who's about to walk into one of the three mistakes you just heard, the only way they find this show is if you help it travel. So if you got something out of this, please follow the show. subscribe wherever you are listening and turn on notifications so the next episode comes straight to you. And if you're watching, hit like and subscribe to the channel. And if you know someone who's about to buy or sell an aircraft, please forward them this episode before they sign, not after. That share might be the most valuable thing you can do for them all year. A quick rating and a review honestly moves the needle more than people realize. It's what tells the platforms to put real, independent Broker free analysis in front of the people who need it, people like you. And I need 30 seconds from you. And you've helped somebody you've never met meet and avoid a major six-figure mistake. And I think that's a good trade. All right, that's the ask. Here's the close. This podcast exists for one reason. To analyze aircraft as capital assets without brokerage spin and without manufacturer narrative. And remember, when you need accurate Defensible and data-driven aircraft values. There's only one name in the industry to trust. That's VRef. Visit VREF.com to get started today. The market is moving. It's just not moving where they're looking. I'm Jason Zilberbrand, and this is the truth about the market. Until next time, fly safe and stay smart.