(Below are excerpts from an article I wrote for an FBO where I was formerly shop foreman.)
WHAT IS A PRE-BUY?
A Pre-Buy is a cheap way to avoid buying someone else's problems!
The biggest lie in aviation is "Fresh Annual!" Don't fall for it.
Essentially a pre-buy inspection is when a neutral party works with the buyer and seller to inspect the condition of the aircraft, much like taking a used car to a mechanic to inspect before buying a car.
What specifically does a pre-buy include? That's up to you!
The FAA does not regulate or define a pre-buy inspection. There is no list or procedure in the FAR's outlining what constitutes a pre-buy. That has created some confusion about what specifically should be included, but here are some conventionally accepted procedures:
Interior and exterior airframe inspection
-Less detailed than one performed during an annual, but thorough enough to detect major corrosion issues or obvious structural defects. The purpose here isn't to investigate every nook and cranny of the plane. Rather, it's to assess the general condition of the airframe for general neglect or deficiencies. The wheel below was on a plane with less than a week on the Annual. The new owner (who did not get a Pre-Buy) asked me to check out their "leaky wheel." The bearing grease was so old it was simply disintegrating and dripping down the wheel. Upon further inspection the wheel itself and also the brake rotors were cracked. A Pre-Buy is designed to avoid these costly problems! (NOTE: All of the pics below were taken while I was performing a pre-buy or immediately following a purchase by a new owner that did not get a pre-buy. All of the planes pictured had an Annual performed within the previous month.)
"My wheel is leaking" - Brand new owner
C-Clip not being retained because hub is cracked, disintegrated grease. Annual signed off 5-days prior.
-The engine should be inspected for obvious signs of oil, fuel, and exhaust leaks and general condition of all hoses and other components (again, not as involved as one performed during an annual. We're looking for the obvious stuff.)
Fuel stains at induction tube indicating expensive repairs ahead.
-A thorough engine run-up should be performed, including a mag check. (Don't waste your time checking mag timing. That's a minor maintenance issue that doesn't involve expensive repairs. Pre-Buys should ignore the little stuff.)
Engine truss mount at firewall. Without any threads extending beyond the nut, vibrations can
shake the bolt loose causing other bad things to happen.
-Cylinder Borescoping? This isn't a typical task performed on a Pre-Buy, but I consider it so valuable that I include this service in my Pre-Buy flat rate. You will receive digital photos of notable discrepancies inside the cylinders.)
-This one requires the owner to provide the inspector with the logbooks, and typically several hours of digging through them to confirm all AD's are up to date. AD research can be the most time consuming aspect of the pre-buy. Keep in mind some AD's can cost thousands of dollars to comply with, and some add several hours (dollars) to every annual inspection if they're recurring. That can drastically change the value of the plane to the buyer.
Also, be wary of ambiguous log book entries like "All AD's current" or similar vague claims. The FAA requires very specific language in the logbooks for AD sign-offs and sadly too many mechanics fall short in their responsibilities in this area. AD compliance reports addressing each individual AD, including a date and method of compliance instill more confidence than a blanket statement of currency.
Seat rail cracks. Not only an AD and a costly repair, but a possibly lethal defect.
WHO CAN PERFORM A PRE-BUY?
Again, there's no FAR addressing this though the inspector, at the very least, should be an experienced A&P. The inspector should be someone familiar with the specific plane being inspected. Don't take an Ercoupe to a Piper shop, and don't have a Cub specialist look over an R-44. The inspector should be someone that has enough experience to recognize the peculiarities (and known issues) of the plane you're interested in buying.
Likewise, your superbest hangar buddy Jimbo may have 200 upvotes on his MooneySpace profile and know lots of cool tricks to get 3000 hours out of a single oil filter, but this type of inspection is best left for certificated mechanics.
What's most important is that the client and mechanic have a solid rapport and understand what specifically is expected for the inspection.
Had the new owner discovered these engines mounts prior to purchase, he
could have negotiated the price to reflect their replacement.
WHAT IS A PRE-BUY NOT?
The purpose of the Pre-Buy is to discover the aircraft's condition, not its value.
A Pre-Buy inspection is NOT an appraisal!
Ultimately, an airplanes value is whatever the purchaser and seller agree it is. That said, a Pre-Buy is an important tool to aid in price discovery. The objective information regarding defects, both mechanically and compliance-wise, help inform both the buyer and seller about the aircraft's value.
A Pre-Buy is NOT an annual inspection!
There is no need for a mechanic to test every bulb, torque every bolt, or wiggle every wire during a Pre-Buy. The idea is to get a general impression of the aircraft's condition, not write up every squawk that needs to be addressed in a perfect world. This is worth noting because the cost between Pre-Buy's and annuals is significant. During a Pre-Buy you want your mechanic to focus on the biggies, not spend their time on every minor defect.
Notwithstanding the caveat that a Pre-Buy is what you want it to be, if your mechanic is writing up stained carpets then he's either focused on the wrong things or he's charging you too much.
Some people choose to pay for an annual in lieu of a pre-buy. I advise against this practice (and so does Mike Busch.) From a buyers standpoint, it's hard to justify the cost and time to pay for such an involved project for a plane you're not even sure you want to own yet. Keep in mind too that if an airworthy item is discovered during this "pre-buy annual," a very uncomfortable love triangle is created between mechanic, buyer, and owner regarding who will authorize and pay for repairs.
Of course, if a sale does eventually go through, it's not uncommon to receive an annual inspection at a reduced rate because a bulk of the work has already been performed. Again, discuss your options and expectations first!
WHO SHOULD GET A PRE-BUY?
Anyone buying a plane! If you've found a plane that fits your mission and is in the right price range, a few hundred dollars pre-buy can save you many thousands of dollars in post-buy headaches. If you have any questions about an upcoming purchase I'm happy to walk you through the pre-buy process.
And remember: When someone tells you a plane has a "fresh annual," make sure to check for "wheel leaks."