Some Common Questions about Selling Mineral Rights

Feb 13

Selling your mineral rights is a major decision that you should only make if you are in possession of the salient facts. Here are some of the common questions about selling mineral rights that you should ask from the get go.
Why would you want to sell your mineral rights?

The value of your mineral rights only kicks in when you exploit the minerals that may be there. You have no real way of knowing if there is anything worthwhile down there; it will depend on many factors. However, if there is a good chance that there is, such as you are in an area known to have rich deposits of oil, for example, then the only way to get it out is to mine it. Unless you have a mining company or know how to do it, this is usually the purview of development companies. Ergo, if you want to profit from your mineral rights, then you should sell them. An alternative is to lease them out, but that brings up a whole new set of questions.

Do you need someone to sell it for you?

You don’t need to get someone to sell your minerals for you. You can do it on your own by signing the proper documents, just like with any real property. However, there is no listing for the fair market value of mineral rights like surface land or cars, for example. You may have a hard time getting the full value out of your mineral rights when the time comes to sell it, or finding qualified buyers to make it easy for you. Companies like mineral auction houses take care of those problems by listing your mineral rights in their database. This is accessible to many qualified buyers that will then bid on the rights. This way, you are sure that you are getting the best possible price that the market can hold for your mineral rights.

What happens after I sell my mineral rights?

Once you sell your mineral rights, you will immediately get a significant lump of cash to spend as you want. However, you lose all control over how the mineral rights are used. If you own the surface rights, you should know that the mineral rights owner has a right to a reasonable portion of the surface land for their mining and development operations at any time. You will no longer have any profit that arises out of these operations, if any. However, if you sell at the right price, you should feel no regrets over this.

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