The aircraft escrow process, explained in plain English.
Every legitimate aircraft sale closes through escrow at a licensed title company. The seller doesn't hand over keys for a personal check; the buyer doesn't hand over a wire for a verbal promise of title. Escrow is the neutral middle that makes the transaction safe for both sides. Here's how it actually works.
Who the title company is and what they do
An aircraft title company is a specialized escrow service that exists because aircraft titles are unusually complicated:
- The FAA maintains a federal aircraft registry separate from any state title system
- Liens can be filed federally with the FAA, plus sometimes at the state level
- Ownership can be in individual names, LLCs, trusts, estates, partnerships, or non-citizen entities
- International sales add export deregistration steps
The main players in aircraft escrow are companies like Aircraft Title Services in Oklahoma City (where the FAA registry physically lives). They handle several thousand aircraft transactions a year and know every quirk.
The step-by-step timeline
Day 1: Offer accepted
Seller and buyer agree on price and any contingencies (typically a quick visual inspection). One party — usually the buyer — opens escrow with the title company. The title company sends both parties a packet of paperwork: bill of sale templates, FAA Form 8050-2 (Aircraft Bill of Sale), title history request, and any state-specific docs.
Day 1–3: Title search
The title company runs a federal title search and a state UCC search. They look for:
- Current registered owner (does the seller actually own it?)
- Existing liens (bank, mechanic's, IRS, etc.)
- Pending lis pendens or other clouds on title
- Any IRS or DOT issues
If there are liens, the title company contacts the lien-holder to obtain a payoff figure and a lien release.
Day 2–5: Buyer inspection (if applicable)
For cash buyer transactions, this is usually a quick visual inspection — we confirm the airplane matches what was described. For broker-listed retail sales, this is the full pre-buy inspection (where most deals die).
Day 3–7: Document execution
Once title is clean and inspection passes:
- Seller signs the FAA Bill of Sale (Form 8050-2)
- Seller signs a state-specific bill of sale if required (Florida, for example)
- Seller provides cancelled registration certificate (Form 8050-3) for FAA recording
- If LLC/trust/estate: corresponding authority documents are provided
- Buyer signs purchase agreement and applicable disclosure docs
Day 5–8: Wire funds to escrow
Buyer wires the full purchase price to the title company's escrow account. The title company verifies receipt before doing anything else. This is the safety guarantee: seller doesn't release the airplane until funds are confirmed in escrow; buyer doesn't wire until docs are signed and ready.
Day 7–10: Closing
With funds in escrow and all docs executed:
- Title company simultaneously records the Bill of Sale with the FAA and releases funds to the seller (less escrow fee and any liens being paid off)
- Buyer receives the original Bill of Sale and supporting paperwork
- Buyer takes possession of the airplane (or arranges pickup if it's elsewhere)
- Buyer files for new registration with the FAA
Day 10+: Aircraft pickup
If the airplane is flyable and we (the cash buyer) are picking it up, one of our pilots flies it home. If it's not flyable, we arrange ground transport — usually a fly-pack truck for piston singles and twins. The cost is on us.
What you pay in fees
Aircraft escrow fees are tiny compared to commission. Typical breakdown:
- Base escrow fee: $400–$700 per transaction
- FAA recording fees: $10–$30
- Lien release recording (if applicable): $25–$50
- Wire transfer fee: $25–$50
- Total: typically $500–$900 regardless of aircraft value
Fees are usually split 50/50 between buyer and seller, or the buyer covers them — depends on the deal. We typically cover the full escrow cost on the deals we do, because the marginal cost is tiny and it removes friction from your side.
What can slow things down
- Bank lien with a slow payoff process. Some aviation lenders take 5–10 business days to issue a lien release. We work around this routinely.
- Estate paperwork. Letters testamentary need to be in hand. If probate is still pending, closing waits.
- LLC docs. If the airplane is owned in an LLC, the title company needs to see the operating agreement and any required member-consent documents.
- Trust docs. Trustee authority needs to be established.
- International title issues. Aircraft previously registered in another country can take weeks longer.
Red flags to avoid
If a buyer ever suggests you skip escrow and "just sign over the bill of sale for a check" — walk away. There's no legitimate reason for that approach. Both real buyers and real sellers want the escrow protection.
If a buyer asks you to wire funds before closing for "deposit" purposes — also walk away. In legitimate aircraft sales, the buyer's funds go to the escrow company, not directly to the seller, ever.
Our actual process
When we agree on a price, we email you a short purchase agreement and open escrow with the title company. The escrow company emails you the FAA paperwork. You sign electronically (or wet-ink for some FAA forms). We wire to escrow. Escrow confirms with you. Escrow releases funds. We pick up the airplane. Done in 5–10 business days for clean title; 10–20 for situations with liens, estates, or LLC structures.
That's it. No mystery, no risk, no broker chasing you for paperwork updates.