Buyer Guide

How Title Search and Escrow Fit Into an Aircraft Purchase

What are title search and escrow, and when do they happen in an aircraft transaction?

Once you have agreed on price with a seller, the transaction still needs to be closed carefully. Title and escrow are the two steps that protect both parties and ensure a clean ownership transfer. Neither is complicated — but skipping either one creates real risk.

Step 1: Agree on price and terms

Before title or escrow enters the picture, you and the seller agree on the purchase price, any contingencies (such as a satisfactory prebuy inspection), and the intended closing timeline. This is often documented in a letter of intent or purchase agreement — a simple contract, not a legal requirement, but useful for clarity.

Step 2: Order a title search

A title search confirms that the seller is the FAA-registered owner and that no liens are recorded against the aircraft. Title searches are handled by aviation title companies, not by TailExchange. The search typically takes one to three business days. If a lien surfaces, it must be released or satisfied before the sale can close cleanly. Do not close without a clean title search.

Step 3: Open escrow

You wire the purchase funds to an aviation escrow company — not directly to the seller. The escrow agent holds the funds and works with both sides to confirm the paperwork (bill of sale, title) is in order and that the title search is clear. This protects you: your money is not released until the transaction conditions are met.

Step 4: Complete the prebuy (if not already done)

If you have not yet completed a prebuy inspection, this is typically done before funds clear escrow. Some buyers complete the prebuy before opening escrow; others open escrow first with a prebuy contingency. Either approach is common — the key is that the prebuy happens before you are committed.

Step 5: Close

Once the prebuy is satisfactory, the title is clear, and both sides are ready, the escrow agent releases the funds to the seller and delivers the bill of sale and title documents to the buyer. The buyer then files an AC Form 8050-2 (Bill of Sale) and AC Form 8050-1 (Aircraft Registration Application) with the FAA to complete the ownership transfer.

Common mistakes

–Wiring funds directly to a seller before title is confirmed — this is how buyers inherit liens.
–Closing without a title search because the seller seems trustworthy — liens are public records and a title search is cheap protection.
–Delaying the FAA registration filing — the buyer should file promptly after closing to establish their ownership in the official record.
–Using a general escrow service instead of an aviation-specialized one — aviation title and escrow companies know the FAA paperwork flow.

Where TailExchange fits

TailExchange helps you find and contact the seller. The title, escrow, and closing steps happen outside our platform through service providers you and the seller select. We do not participate in the financial transaction and we do not provide title or escrow services.

Term

Prebuy Inspection

An independent mechanical inspection performed by an A&P mechanic before an aircraft purchase.

Term

Title Search

A review of FAA registry and lien records to confirm aircraft ownership and identify any encumbrances before purchase.

Term

Escrow

A third-party service that holds purchase funds and documents during an aircraft transaction until all conditions are met.

Guide

Prebuy Inspection vs. Annual Inspection

What is the difference between a prebuy inspection and an annual inspection?