Process · 10 min read

Aircraft escrow and title, explained: how an airplane sale actually closes.

Aircraft escrow is how an airplane changes hands safely: a neutral aviation title and escrow company searches the FAA record for the owner and any liens, holds the buyer's money, collects the signed FAA paperwork, and then — at the same moment — files the sale with the FAA Aircraft Registry and pays the seller. The seller never signs over an airplane for a personal check, and the buyer never wires money on a promise of clean title. Here's how it works, what it costs, and what can slow it down.

What an aviation title and escrow company does

Aircraft titles don't work like car titles. There is no state title certificate; ownership and liens are recorded federally with the FAA Aircraft Registry in Oklahoma City, which is why most aviation title companies are based there. On a typical sale, the title and escrow company:

• Searches the title — the FAA record for the registered owner, recorded liens, and any gaps in the chain of ownership.
• Gets lien payoffs and releases from lenders, and pays them off from the sale proceeds.
• Holds the deposit and the purchase price in a trust account until everything is ready.
• Prepares and collects the FAA paperwork — the bill of sale, the buyer's registration application, and authority documents for an LLC, trust or estate.
• Files the sale with the FAA and releases the money at closing.
• Offers title insurance, if the buyer wants it.

For larger aircraft covered by the Cape Town Convention, the sale is also registered on the International Registry; most piston singles fall below its size thresholds, and the title company will tell you if yours doesn't.

What an aircraft title search checks

• The registered owner — is the person or company selling actually the owner of record, under exactly that name?
• Recorded liens — bank and finance-company security agreements filed with the FAA, including old loans that were paid off but never released.
• Other claims — mechanic's liens (filed with the FAA or under some states' laws), tax liens and anything else clouding title.
• Registration status — an expired or cancelled registration has to be sorted out before the sale records cleanly.
• The chain of title — every transfer since the airplane was built should be on file; a missing bill of sale from decades ago can still need fixing.

The most common problem we see is a loan paid off years ago whose release was never recorded. It's fixable — the title company contacts the lender (or its successor) for a release — but it's the single biggest cause of delayed closings, so it's worth checking early.

The aircraft escrow process, step by step

1. Agree on the price and sign a purchase agreement

Buyer and seller agree on the price, any inspection contingency, the delivery location and the closing date. One side — usually the buyer — opens escrow, and a refundable deposit often goes into the escrow account at this point.

2. Title search (day 1–3)

The title company pulls the FAA record and reports what it finds. If there's a loan, it requests a payoff figure; if there's an old unreleased lien, it starts chasing the release.

3. Inspection (if there is one)

For a cash-buyer sale this is usually a quick look to confirm the airplane matches what was described. For a retail sale it's the buyer's full pre-buy inspection — the step where most deals either close or fall apart.

4. Sign the documents (day 3–7)

• The seller signs the FAA Aircraft Bill of Sale (AC Form 8050-2), exactly as the owner's name appears on the registration. Every registered co-owner signs.
• The buyer signs an Aircraft Registration Application (AC Form 8050-1).
• If the owner is an LLC, trust or estate, the documents that show who can sign go in too — for an estate, letters testamentary or letters of administration.
• The buyer and seller sign the escrow instructions and closing statement.

Most of this can be signed remotely; you don't need to be at the airplane or in the same state as the buyer.

5. The buyer wires the funds (day 5–8)

The buyer wires the purchase price to the title company's escrow account, and the title company confirms it has arrived before anything else happens. This is the protection: the seller's signed bill of sale isn't filed until the money is there, and the money isn't released until the paperwork is ready.

6. Closing (day 7–10)

With funds received and documents signed, the title company files the bill of sale and registration application with the FAA, pays off any loan, and wires the balance to the seller. The buyer can carry the pink copy of the registration application in the airplane as temporary authority to fly within the United States for a limited period while the new certificate is issued.

7. After closing

The seller reports the sale to the FAA Registry, then cancels the insurance and hangar once the airplane has been delivered. If the buyer is a cash buyer like us, we arrange the pickup: one of our pilots flies it home, or it goes by truck if it isn't flyable — at our cost.

How much does aircraft escrow cost?

Escrow fees are small next to a broker's commission. A typical breakdown for a piston airplane:

• Escrow and closing fee: $400–$700
• FAA filing fees: a few dollars per document
• Lien release recording, if needed: $25–$50
• Wire fees: $25–$50
• Total: typically $500–$900, regardless of the airplane's price

Title insurance, if the buyer wants it, is extra. Who pays is part of the deal; splitting the escrow fee 50/50 between buyer and seller is the common arrangement — and the one we use on every deal.

What can slow an aircraft closing down

• An old lien that was never released. The lender may have merged or closed; tracking down a release can take days or weeks.
• A slow loan payoff. Some aviation lenders take 5–10 business days to issue a payoff letter and release.
• A name that doesn't match. The bill of sale has to match the registration exactly; a changed name or a dissolved company needs supporting documents.
• An estate still in probate. The person signing needs court authority first.
• LLC and trust paperwork. The title company needs to see who is authorized to sign.
• An expired registration or a previous foreign registration.

Red flags

If a buyer suggests skipping escrow and "just signing over the bill of sale for a check," walk away. If anyone asks you to send money directly to them for a "deposit" or "fees," walk away. And before you or a buyer wire anything, call the title company at a number you looked up yourself to confirm the wiring instructions — email-based wire fraud targets real estate and aircraft closings alike.

How our closings work

When we agree on a price, we send a short purchase agreement and open escrow. Every deal closes through AIC Title escrow, and the fee is split 50/50 between buyer and seller. AIC sends you the FAA paperwork to sign, we wire the purchase price to escrow, AIC confirms it with you and releases your money at closing, and we pick up the airplane. Clean title usually closes in 5–10 business days; liens, estates or LLCs can take 10–20.

Selling for the first time? Escrow is step 8 of our complete guide to how to sell an airplane.

Aircraft escrow questions

Ready for a number? See how our cash offers work — or jump to your model: Sell your Cessna 172 · Sell your Cessna 182 · Sell your Piper Cherokee · Sell your Beechcraft Bonanza

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