Buyers Guide FLYING Magazine

Escrow and Aircraft: Why It’s Important and How It Works

This guide will walk through what you need to know about using this financial agreement to purchase an airplane.

Christina Hancock

Tuesday, April 29, 2025 at 01:14 PM ET

Verified

Edited By: Nick Torres

Due to the substantial financial stakes, people involved, and FAA requirements, it is critical to ensure that the process is smooth and secure. [Adobe Stock]

Key Takeaways:

Aircraft escrow services act as a neutral third party to securely hold funds and documents during a purchase, ensuring all agreed-upon conditions are met before simultaneously transferring ownership and releasing funds to minimize risks for both buyer and seller.
Key benefits of using an escrow service include mitigating fraud, ensuring proper FAA registration, securely managing funds via wire transfers, and handling the release of any existing liens on the aircraft.
The escrow process involves setting up the account, depositing funds, providing purchase agreements, conducting a critical title search to identify liens or encumbrances, and gathering all necessary documentation from both parties for official FAA filing.
A thorough aircraft title search is crucial to verify legal ownership, identify any outstanding liens or financial obligations, ensure proper registration with the FAA, and prevent complications like acquiring a stolen or improperly documented aircraft.

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Purchasing an aircraft is a significant investment, whether you’re a private individual buying a small personal airplane or a company acquiring a corporate jet. Due to the substantial financial stakes, people involved, and FAA requirements, it is critical to ensure that the process is smooth and secure. Using an aircraft escrow and title company can be a significant tool in the purchase of an aircraft. This guide will walk through what you need to know about using escrow, why it’s important, how it works, and considerations to keep in mind.

This Article First Appeared in FLYING Magazine

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Christina Hancock

Christina Hancock is the senior escrow adviser at Aero-Space Reports, bringing over 18 years of industry experience.