Selling your mineral rights to the property you own can be a quick way to make money from an underused asset. However, these transactions can be a little complicated if you have never navigated a deal of its kind before. There are a few pertinent issues you should understand before moving forward with the sale of your oil and mineral rights.
1. Mineral Rights Explained
Mineral rights holders are permitted to extract minerals from beneath the earth. The potential minerals included in these extractions include but are not limited to:
- oil
- natural gas
- metal ore
- copper
- gravel
- stone
- clay
It would be best if you do a little research to learn what minerals are common in the area of your property before deciding about selling mineral rights.
2. Surface Rights
Selling the mineral rights to your land does not mean you lose ownership of the property. Surface rights operate pretty much the way the words sound. These are the rights to the surface of the property. You retain these rights even when you sell your rights to the minerals beneath the land.
Surface rights are entirely separate from mineral rights, and in some places, mineral rights owners have rights that exceed those of surface rights owners. Make sure you understand the provisions needed in your state to protect your surface rights and your property if you decide to sell your mineral rights.
3. The Value of Mineral Rights
The market often determines the value of mineral rights, so your first research should be in the recent sales of rights for similar properties. Pay attention to factors like the size of the property, size of the mineral deposit, and the number of mines. These factors change quickly, so if you think about selling the oil and mineral rights to your property for some time without pulling the trigger, it is a good idea for you to recheck comparable properties before entering negotiations.
4. Protecting Yourself
Most people you meet while shopping the mineral rights to your property will be honest and hard-working businessmen and women. However, a few unscrupulous companies are lurking in the shadows in the mineral rights industry. A little common sense will do you well when negotiating a sale of your mineral rights. Remember to read every word in any contract handed to you and only sign a contract after consulting with an attorney. Also, be wary of once in a lifetime offers. If an offer seems too good to be true, more than likely it is.
5. Attention to Detail
The money you will make from selling the mineral rights to your property will likely put a smile on your face. However, you must identify and understand what you are willing to deal with, as well as what you are not. Ask yourself questions like are you comfortable with the methods used for extraction. Can you deal with the noise that will result from the removal of minerals? If you are unsure or unhappy about anything in this stage of the negotiations, you may want to reach out to an attorney.
Final Thoughts
Selling the rights to the minerals beneath your property is a big decision. If the circumstances are right, and you negotiate a good deal on your behalf. The decision can pay enormous dividends for you. The trick is to familiarize yourself with the variety of information you need to know before attempting to sell the oil and mineral rights to your property.