Group Share - Queue to sell shares?
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Group Share - Queue to sell shares?
Is is customary for an aircraft group to have a "queing system" for selling shares in the aircraft?
In other words, you cannot sell your share but have to wait until others in the group (who have had theirs on the market for longer) have sold theirs.
So for example:
Person 1. Announced he wanted to sell his share late 2005 wants £6000
Person 2. Announced he wanted to sell his share early 2006 wants £3500
Person 3. Announced he wanted to sell his share today, wants £3000
A prospective buyer comes along and values the share at (say) £3000. Offers £3000 to Person 3, but is told he has to sell his share to the first in the queue. Person 1 naturally declines the offer because it is too low. He is told he cannot approach Person 2 either. Share is not sold, and the buyer walks away.
People who really want to sell the share could market the share like mad (advertising, posting on forums etc.) but it would not help at all under this system if they were lower down on the queue.
Let's just say (hypothetically) that I am Person 3 in a Cessna group share.. it could take three years to sell the thing!
Is this a common system? Is it workable, especially when shares can sometimes take ages to shift?
T.
In other words, you cannot sell your share but have to wait until others in the group (who have had theirs on the market for longer) have sold theirs.
So for example:
Person 1. Announced he wanted to sell his share late 2005 wants £6000
Person 2. Announced he wanted to sell his share early 2006 wants £3500
Person 3. Announced he wanted to sell his share today, wants £3000
A prospective buyer comes along and values the share at (say) £3000. Offers £3000 to Person 3, but is told he has to sell his share to the first in the queue. Person 1 naturally declines the offer because it is too low. He is told he cannot approach Person 2 either. Share is not sold, and the buyer walks away.
People who really want to sell the share could market the share like mad (advertising, posting on forums etc.) but it would not help at all under this system if they were lower down on the queue.
Let's just say (hypothetically) that I am Person 3 in a Cessna group share.. it could take three years to sell the thing!
Is this a common system? Is it workable, especially when shares can sometimes take ages to shift?
T.
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Share is not sold, and the buyer walks away.
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So Cal,
Yes I take your point I've re-read my reply. It wasn't supposed to be abrupt.
Ok, I've not in the group, but was thinking of joining it. Let's just say that my offer, and Person 3's asking price matched up. I was actually trying to disguise who I was - aviation is a small sky.
T.
Yes I take your point I've re-read my reply. It wasn't supposed to be abrupt.
Ok, I've not in the group, but was thinking of joining it. Let's just say that my offer, and Person 3's asking price matched up. I was actually trying to disguise who I was - aviation is a small sky.
T.
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As a complete aside I entered the follwing search term into Google:
"group ownership" aircraft queue
(Safe search off), clicked on 'Images'. Uurgh. About as horrid about the rules in selling a share.
Edited: Spelling of 'seeling' to 'selling'
"group ownership" aircraft queue
(Safe search off), clicked on 'Images'. Uurgh. About as horrid about the rules in selling a share.
Edited: Spelling of 'seeling' to 'selling'
Last edited by tiggermoth; 28th Feb 2007 at 00:52.
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About as horrid about the rules in seeling a share.
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A queue system is not uncommon. However, a system where you can set a price and prevent other shareholders from selling at a lower price is uncommon.
Normally, the group sets the price for the sale of a share and if the first in the queue doesn't want to sell for that price, then the next in the queue can. Alternatively, some groups allow the seller to set the price, but if the buyer doesn't want to pay that price, the next in the queue can sell if they are happy with the offered price.
Normally, the group sets the price for the sale of a share and if the first in the queue doesn't want to sell for that price, then the next in the queue can. Alternatively, some groups allow the seller to set the price, but if the buyer doesn't want to pay that price, the next in the queue can sell if they are happy with the offered price.
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In gliding, group ownership (normally max 2 or 3 per glider) is common.
A frequently applied (and often unwritten) rule is that if one syndicate partner wants to sell, but there are no takers within that gliding club, then after a month or so the whole glider has to be put up for sale and the proceeds divided up.
I certainly never heard of queues of would-be sellers! Sounds ominous & not a group to buy into.
A frequently applied (and often unwritten) rule is that if one syndicate partner wants to sell, but there are no takers within that gliding club, then after a month or so the whole glider has to be put up for sale and the proceeds divided up.
I certainly never heard of queues of would-be sellers! Sounds ominous & not a group to buy into.
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Any groups I have been in ask that shares are sold through the group - ie. The Treasurer. It seems to work in a gentlemanly manner - although depending where you are it can take a while to sell shares in the current GA climate.
Anyway - the price is generally decided by the group based on 'market value' ... and not necessarily just sold off to the lowest bidder - after all an individual caves in to a ridiculously low offer just because they need the money quickly it forces down the value of everyone elses share.
Work out the value of the aircraft, deduct any loans (to other group members) or outstanding debt to other parties, amount stashed away for an engine fund or in the bank - and then divide by the number of owners. At last that will give you a feel for the 'right' price.
Nothing to stop seller finding prospective buyers though.
In other circimstances the group might consider buying someone out
Anyway - the price is generally decided by the group based on 'market value' ... and not necessarily just sold off to the lowest bidder - after all an individual caves in to a ridiculously low offer just because they need the money quickly it forces down the value of everyone elses share.
Work out the value of the aircraft, deduct any loans (to other group members) or outstanding debt to other parties, amount stashed away for an engine fund or in the bank - and then divide by the number of owners. At last that will give you a feel for the 'right' price.
Nothing to stop seller finding prospective buyers though.
In other circimstances the group might consider buying someone out
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Our group rules state that the seller must first offer his share back to the group for first refusal. Following this it can be advertised on the open market, the only time a que develops is when more than one share becomes available for disposal. The first in line then gets priority but if say an aquaintance of seller number 2 decides to buy his share then that is just the way it is.
You looking for a share in a C172 at Barton Tiggermoth? If so, PM me.
Regards
SRD
You looking for a share in a C172 at Barton Tiggermoth? If so, PM me.
Regards
SRD
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Any groups I have been in ask that shares are sold through the group - ie. The Treasurer.
The nearest I've seen was a 2-aircraft syndicate that I belonged to, where if you wanted to sell a share, you had to give first refusal to people in the syndicate who only had a share in the other aircraft. Seemed to work fine, when I wanted out, I sold my share in a couple of weeks, for a good price, to somebody I already knew, and who knew the aircraft's history and rules already.
G
G
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in ours it is the group that controls things...it sells the share and determines the price which is altered from time to time...
even if the person leaving finds the purchaser..(which is usually not the case )...he introduces the proposed purchaser...and the rest is between the committee and that person.
to allow any one member to decide how much his share is worth would be impossible as it could create the situation you describe tiggermoth...
and its is normal in our group for people wishing to leave to be taken in the order in which they indicate that intention...
the dean.
even if the person leaving finds the purchaser..(which is usually not the case )...he introduces the proposed purchaser...and the rest is between the committee and that person.
to allow any one member to decide how much his share is worth would be impossible as it could create the situation you describe tiggermoth...
and its is normal in our group for people wishing to leave to be taken in the order in which they indicate that intention...
the dean.
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From a marketing perspective its better to control sales centrally. It always looks better if one share is for sale rather than 3. Who would buy into a group that has 3 shares separately advertised and all for 50 p less than the other. It looks suspiciously like a big bill is on the way and opens the door for a dutch auction on the price. The buyer does not need to know how many shares are for sale.
The other thing is a seller does not really care who buys in as long as they have the cash whereas the remaining members are very interested in the credentials of the buyer.
Having said that if the share owner wants to give his share away, why not? It has happenned to get out of paying the monthlies on an ac you have stopped flying.
I'm all for the central control economy in share trading.
The other thing is a seller does not really care who buys in as long as they have the cash whereas the remaining members are very interested in the credentials of the buyer.
Having said that if the share owner wants to give his share away, why not? It has happenned to get out of paying the monthlies on an ac you have stopped flying.
I'm all for the central control economy in share trading.
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In my experience, the queing system is common. But so is the principle that the group sets the share price and that share being sold at the same time are advertised at the same price.
In practise, if a punter makes an offer to the group that is less than the asking price, and one member is prepared to accept this lesser offer and the other (who is at the head of the queue) is not, it would seem sensible to allow the member who is prepared to accept the offer to do so.
It would also be worth trying to getting a rule added to say that if the queue ever becomes the majority of the members then the aircraft will be sold, i.e. in a group of six you would only ever have three shares for sale as a maximum - as soon as a fourth person wanted/needed to sell, the aircraft would be sold in its entirety.
Good Luck.
tp
In practise, if a punter makes an offer to the group that is less than the asking price, and one member is prepared to accept this lesser offer and the other (who is at the head of the queue) is not, it would seem sensible to allow the member who is prepared to accept the offer to do so.
It would also be worth trying to getting a rule added to say that if the queue ever becomes the majority of the members then the aircraft will be sold, i.e. in a group of six you would only ever have three shares for sale as a maximum - as soon as a fourth person wanted/needed to sell, the aircraft would be sold in its entirety.
Good Luck.
tp
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Blimey - I didn't realise that the queuing system was quite common!
Circumstances can change so quickly, and shares are sold so slowly - it is can be a real financial risk buying into a share then - the monthly cost could add up to thousands by the time the share is eventually sold (especially if others have to be sold first).
Also with regards to a prospective buyer possibly being put off if he knows that there are a number of people wanting to sell off shares in the aeroplane - does he not have a right to know?
This is a real eye opener.
How long does it typically take to sell a share? Would six months be about the time, or twelve months? The notices on the notice board for shares in aeroplanes are old, battered and faded - they have been up for some considerable time it seems.
Circumstances can change so quickly, and shares are sold so slowly - it is can be a real financial risk buying into a share then - the monthly cost could add up to thousands by the time the share is eventually sold (especially if others have to be sold first).
Also with regards to a prospective buyer possibly being put off if he knows that there are a number of people wanting to sell off shares in the aeroplane - does he not have a right to know?
This is a real eye opener.
How long does it typically take to sell a share? Would six months be about the time, or twelve months? The notices on the notice board for shares in aeroplanes are old, battered and faded - they have been up for some considerable time it seems.