Should you Sell Mineral Rights

//Should you Sell Mineral Rights

Should you Sell Mineral Rights

By |2019-02-25T16:02:39-05:00August 10th, 2015|Sell Mineral Rights|

Should you Sell Mineral Rights

One topic that sparks heated debates is deciding if you should sell mineral rights or hold onto them.    You’ll find strong opinions on both sides of this argument because there is no right answer.   The decision to sell mineral rights is a personal one.   Since it’s a personal decision, the best thing we can do is lay out the difference between selling mineral rights or holding onto them.

The Case for Holding Onto Mineral Rights

If you are in a financial position where you don’t need the money for anything and you are willing to hold onto your mineral rights for a long period of time (10+ years), holding might be the right option for you.    Here are some of the benefits of holding onto your mineral rights:

  • Leasing:  When you own the mineral rights, the first step in the drilling process is leasing mineral rights.  You will receive a lease bonus when you lease your mineral rights to an operator.  Think of this lease bonus as a rent payment on your property.  They don’t own the property, they simply have the option of drilling over a 3 to 5 year period.   You can make money by leasing your property out numerous times.   If they don’t drill, you still own the property and you can lease the property again and make more money.
  • Royalties:  When you hold your mineral rights, you are hoping that your property is leased and eventually drilled on.  Once drilling occurs and they locate oil and/or gas, you will be paid for your proportionate share of the income.  This income from the oil and gas production comes in the form of a royalty check.   These royalty checks are the benefit you receive for holding onto your mineral rights.   Once the royalties are being produced, you’ll simply get a check in the mail each month.   Your checks will slowly decline over time until eventually you no longer receive checks because there isn’t enough production.
  • Flexibility:  Once you sell mineral rights they are gone forever.  If you are in a financial position where you don’t need to sell anytime in the next 10+ years, holding them makes sense.   You have the flexibility to see if drilling ever takes place OR you can decide to sell mineral rights at any time.

The Case for Selling Mineral Rights

There is a large following of people who would tell you that you should never sell mineral rights.   It’s important to understand that selling mineral rights depends on your personal situation.   The decision to sell mineral rights ultimately comes down to whether you have a financial need to sell or you simply don’t want to wait for drilling to occur.   Here are some of the benefits of selling mineral rights, which are also some of the most common reasons people decide to sell mineral rights:

  • Timing:  Many mineral owners sell mineral rights simply because they don’t want to wait years to see if any drilling occurs.   The process of leasing your mineral rights and then waiting for drilling to occur can take a minimum of 5+ years and that’s if things are going quickly.   If you don’t want to hold onto the property for 10+ years to see what happens selling mineral rights make sense.
  • Gamble:  Holding onto your mineral rights can be a gamble.  Some people hold onto their property for literally decades and nothing ever happens even after they have been leased multiple times.   There is no assurance any drilling will take place even after you are leased.  In addition, the value of the royalties could turn out to be less than expected.  You could spend years waiting for drilling to occur and it either never happens or produces very small royalties.
  • Retirement:  A lot of mineral owners choose to sell during retirement.   Owning non-producing mineral rights doesn’t produce any income unless you are leased.  Many retirees decide to sell to avoid paying taxes each year and to put some cash in the bank.  In addition, the sale of mineral rights converts the property into cash which makes estate planning significantly easier.
  • Financial Need:  There are many individuals who find themselves in a financial situation where they need to sell.  They might be losing their home or have unforeseen medical bills comes up.  Regardless of the reason, selling mineral rights to meet this short term obligation is never a bad decision.  Losing your home and letting your credit score go down the toilet doesn’t make sense if you own mineral rights.  It’s better to sell mineral rights and help meet that need.  If your considering whether to withdrawal some 401K funds or sell mineral rights, selling mineral rights is a much better option from a tax perspective.

Your personal decision

Deciding whether to sell mineral rights or hold onto them is a difficult question.  If you find yourself conflicted over whether to sell mineral rights or hold onto them, remember that it’s your decision.   Every person has unique things going on in their life.  Every person has to make the decision that will best benefit their family.   Holding onto a property that may never get leased or drilled on during your life time doesn’t make sense if you can sell it and use that cash today.

Contact US Mineral Exchange:

If you have questions about your mineral rights, we’re here to help!  We speak with mineral owners every day and we look forward to hearing from you.  Please don’t hesitate to fill out the form below with any questions and our friendly team will respond quickly.

Free Consultation

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Average amount you receive each month:

Is the property leased?:

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If you have check stubs, lease agreements, deeds, or other documentation, upload those documents here:

Tell us a little about your property and what you hope to accomplish? Please include state and county of property.

Common Questions

The more information you can provide about your property the better! We can give you a better idea about the value of selling mineral rights if you provide more information. The most important thing we need to know is the state, county, and net mineral acres owned. Any additional documentation you can provide is extremely helpful!
If you are just looking for information and do not want to sell mineral rights, fill out the form anyway! We’re here to help answer your questions. If you just want to better understand your mineral rights, we’re happy to help. We get inquiries every day from mineral owners with questions about the value of their mineral rights. We just hope you’ll remember us when you do decide to sell mineral rights!
Absolutely not! When you submit an inquiry form with information about your mineral rights, you are not obligated to anything. If you do end up deciding to sell mineral rights, you will never be obligated to accept any offers you receive! When you list mineral rights at US Mineral Exchange, you have the ability to see what the market is willing to pay for your property and then decide if you would like to sell with zero obligation.
We typically respond to inquiries in less than 12 hours and usually within hours of submitting the contact form. At US Mineral Exchange our goal is to be available to mineral owners as a resource so we pride ourselves on quickly replying and communicating with mineral owners.
At US Mineral Exchange, we take privacy very seriously. We will NEVER sell your information or use it without your consent. When you send us documentation or tell us about your property, that information does not go outside our company without your consent. Even when you list a property for sale on our website, we strictly control who has access to the information about your listing so that only legitimate buyers will be able to see property details.
Our goal at US Mineral Exchange is simple. We help mineral owners connect with a large network of mineral rights buyers who compete to pay you the highest possible price. What does this mean for you? When you list at US Mineral Exchange, you have the best chance of getting the highest possible offer.

Many mineral owners make the mistake of finding a couple buyers and requesting a quote. They then accept an offer far below market value because the buyers they found weren’t the ones willing to pay the highest price. When you list at US Mineral Exchange, it allows all the buyers to come to you which means more cash in your pocket. We frequently speak with mineral owners who have an offer in hand but want to know if it’s fair. After listing at US Mineral Exchange, they get a higher offer than the one they had almost every time.

The reason that so many mineral owners decide to sell mineral rights at US Mineral Exchange is access to our large network of mineral rights buyers. Our goal is to help you get top dollar for selling mineral rights by getting your property in front of a huge audience of buyers. This allows buyers to compete against one another which ensures you get fair market value for selling mineral rights.
There are absolutely no costs to list your property. We operate using a success-based fee. Meaning that if we cannot get your property sold, you owe us absolutely nothing. All offers we present to you are net of our commission. If you accept an offer presented, the buyer or the buyers closing agent pays us our commission directly at closing. You never have any out of pocket expenses – EVER.