How to Sell Mineral Rights
If you want to sell mineral rights, you probably want to find out as much as you can about the process before you commit to a decision. A successful sale that earns you maximum profit with minimum effort depends on a confident seller familiar with the ins and outs of a complicated, time-sensitive market. Our mineral rights brokers at The Mineral Auction have developed a step-by-step guide to help you sell mineral rights at the best possible price. Once you understand the basic process, you will be better able to make an informed decision about how to proceed.
Eight Steps to Sell Your Mineral Rights
- Assess the risks and benefits of selling your specific asset in the current market. Is it a good time to sell? If you wait, will your minerals decrease or increase in value?
- Learn about the legal requirements for selling. This step might also involve encountering or generating legal descriptions, leases, and check stubs.
- Begin the process of compiling data from Geographic Information Systems (GIS) maps and other relevant databases. You will use this data to frame your mineral rights as particularly desirable to prospective buyers.
- Begin the process of advertising to buyers. You will want to reach as many potential purchasers as you possibly can to make sure you find the best price.
- Assess offers as they come in. This step can be particularly difficult because many owners are not market specialists and are therefore unable to identify the best offers easily. Is the highest price you have been presented so far the highest you can get? How can you tell if a buyer is credible and trustworthy? Should you keep advertising or move on to the next step?
- Once you have settled on an offer, you can draft a Purchase and Sale Agreement (PSA). The PSA legally specifies the terms of the sale.
- The buyer will present a deed before closing, another legal document that finalizes the sale.
- If all goes well, after both parties have agreed on the PSA and the deed, the buyer will pay you.
Though this process is extremely time-consuming and labor-intensive, it has successfully yielded fantastic selling prices for our clients. However, several of these steps demand a volume of work or a network of buyers that individual sellers simply cannot access. It is unfortunate that even the most knowledgeable seller will struggle to have multiple buyers see the property to generate competition and secure the highest possible price. In fact, there are several risks associated with the sales process of mineral rights that you can prepare for and avoid.
Common Risks to Avoid When Selling Mineral Rights
The high-stakes sale of mineral rights necessarily involves quite a few common pitfalls. Knowing what they are can help you avoid them as you move towards a successful closing. A few examples of common risks are:
- Waiting too long to sell: The value of your assets can decrease over time, and you need an extensive knowledge of market trends to make sure you sell your mineral rights at the right moment.
- Settling on the first offer: If you need money quickly then it can be tempting to take the very first offer you receive. This approach often results in an incredibly low price.
- Making mistakes judging the market because of stress or time constraints: Getting the best price depends on spending huge amounts of time on your sale. The intensity of the effort can result in anxiety and impatience.
- Failing to connect with enough buyers: When you cannot connect with enough buyers, you might not reach the best individual buyer. You are also missing out on the ability to generate competition to drive up the price of your asset.
- Falling prey to flippers: Sometimes experienced sellers will scout out properties, buy them below market value, and sell them for a higher price.
These problems have cost mineral rights owners a staggering amount of money. Time constraints, an untrustworthy buyer, or an advertising network that is slightly too small can decrease your profits immensely. For example, you might approach a credible buyer who asks for extensive GIS documentation. If you do not have that research on hand, you could miss a fantastic offer. Thankfully, many of these problems can be avoided if you sell mineral rights with an experienced broker.
Should I Hire a Broker to Sell My Mineral Rights?
Many mineral rights owners are skeptical of hiring a company to help with the sale of their property. Savvy, business-minded individuals are especially likely to question the necessity of working with brokers. However, we have seen firsthand the impact that hiring a broker can have on the final price. Clients who approach our team with offers in hand are stunned by the sharp improvements that happen once our team begins our regiment of advertising and research.
You should consider the many benefits of working with our brokers before or during the sale of your mineral rights. Some include:
- Gaining immediate access to a network of over 6,000 buyers: When we put your property before our expansive network, we generate competition that can drive up the price and exponentially increase the chance of reaching a buyer who will make an excellent offer.
- Saving time and effort: We take on a wide array of responsibilities including finding buyers, determining the market value of your rights, overseeing the relevant legal documents, and preparing research.
- Gaining specialized knowledge of the market: Our experience has prepared us to recognize great prices and easily identify trends.
- Obtaining extra legal help: We are equipped to assist with any legal procedures involved in the sale including writing contracts, signing contracts, and negotiating deeds.
- Knowing that our team will work hard for you: We match our fee to the price you get for your rights, so you know we will be motivated to get you the best possible outcome.
There are many things to consider when you decide to sell mineral rights. The steps involved require quite a bit of work, but the results can mean financial security for you and your family. Our mineral rights brokers at The Mineral Auction understand the importance of obtaining the highest price for your mineral rights. We are prepared to work diligently to sell your property for the most money possible to a trustworthy buyer. If you are interested in learning more about our services, feel free to contact us at (512) 698-2802.