How to Sell Your Mineral Rights

Landowners in the United States have the right to lease or sell all or a portion of the mineral rights under their land. You may choose to sell your rights to pay for a dream vacation, clear up estate issues, or to fund emergency spending. Companies and investors who buy mineral rights assume the risk that profitable production will occur on the property at some point. If you choose not to sell your mineral rights, you could presumably take on production yourself and make more money, but you would incur major development expenses and run the risk of unfruitful drilling. For many homeowners, the idea of a lump settlement today is better than the chance of income later.

it's common for property owners with rights in the Barnett Shale to allow companies to drill on their land
It’s common for property owners with rights in the Barnett Shale to allow companies to drill on their land

Thinking about selling your mineral rights? Here are the best steps to take:

  1. Verify Ownership

Before you can search for buyers, you need to prepare the appropriate documentation. Your first step should be verifying who owns the mineral rights under your land. You can check land records with your county clerk’s office to help you create a chain of title. Check for all instances where the mineral rights have changed hands to determine who currently owns the rights and ensure that you in fact have ownership to the rights. While this process can take some time, investors will not buy mineral rights until ownership is verified.

  1. Substantiate with Documentation

Documentation is key to getting maximum value for your mineral rights. You will need to show buyers proof of ownership with your deed, lease agreement, division order, royalty check stubs, and any other documentation that applies to you. If you have never leased your mineral rights, you will need to provide at the very least:

  • County and state
  • Survey and abstract number
  • Number of acres you own
There's lots of money to be made off of West Texas mineral rights
There’s lots of money to be made off of West Texas mineral rights
  1. Hire Professionals

While hiring an oil & gas attorney may sound expensive, having legal representation who is well-versed in the nuances of mineral rights sales contracts may save you money in the long-run. A lawyer will advocate and negotiate the contract terms on your behalf so that you don’t get duped into accepting an unfavorable contract.

  1. Find a Buyer

The next step is finding a buyer. There are dozens of companies and investor networks that buy mineral rights, so keep in mind that you do not need to accept the first offer. When you submit your information, you will receive an offer for your rights. It is in your best interest to put your property in front of as many potential buyers as possible to get exposure and maximize your potential payout.

Be careful to avoid mineral rights flippers who will offer an option agreement. These agreements may have a time frame of up to 90 days which allows the company to search for a buyer who will pay more money for your mineral rights so they can pocket the difference. You can also choose to sell a portion of the mineral rights if that is in your best interest.

Even if there’s an offer on the table, don’t feel obligated to sell your mineral rights Take time to consider every offer you receive and make absolutely certain you are ready to sell.

 

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