Understanding Market Value<\/h2><\/div>The market value for mineral rights is complex. There are many different factors that play a role. Every buyer evaluates your mineral rights differently. If you have received offers to sell royalties, you have probably seen a large difference between the offers.<\/p>\n
This makes the process of figuring out the true market value difficult for mineral owners. There is no Zillow<\/a> or Redfin<\/a> for mineral rights. There is no mineral rights appraisal service<\/a> that can give you an accurate market value.<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div>The market value of mineral rights is determined by what a buyer is willing to pay\u00a0TODAY<\/strong><\/span>\u00a0for your minerals.<\/span><\/p>\n<\/div><\/div><\/div><\/div>![\"\"](\"https:\/\/www.usmineralexchange.com\/blog\/wp-content\/uploads\/2015\/01\/Logo_BW_transparent_2-150x150.png\")
<\/p>\n<\/div>
<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div>A lot of mineral owners fall into a common trap. They believe that their mineral rights may have more value in the future. We hear phrases all the time like, “When the price of oil goes up” or “When they drill a new well” or “Once they get that new pipeline in” and use this as justification for what their mineral rights might be worth in the future.<\/strong><\/p>\nIf you are selling a home, the market value<\/a> is based upon what that home looks like today. You cannot sell your home above market value because it will be a lot better once renovations are done. You cannot sell your home above market value because the neighborhood will be much nicer in 10 years. Market value is all about the current value<\/strong> of your mineral rights.<\/p>\n<\/div>Competition determines Market Value<\/h3><\/div>If you are like most mineral owners, you have been receiving offers to sell mineral rights.\u00a0 A lot of mineral owners sell far below market value because they assume their highest offer is the best market price.\u00a0 Do not fall into this trap!<\/p>\n
The only way to sell mineral rights for fair market value is competition.\u00a0 When mineral buyers are forced to compete they must pay market value.\u00a0\u00a0 Many mineral owners gather up a few offers.\u00a0 These offers tend to vary a lot from the smallest to largest.\u00a0 Since the offers vary a lot, they see one number that looks way higher than the others.<\/p>\n
If you see an offer for $2,750\/acre and then another for $4,000\/acre, the higher offer sounds way better!\u00a0 You must be getting fair market value right?\u00a0 Wrong! <\/strong><\/p>\nEven though your highest offer may be way higher than your lowest offer, it does not mean your highest offer is fair market value.<\/p>\n<\/div>
![\"Market](\"https:\/\/www.usmineralexchange.com\/blog\/wp-content\/uploads\/2020\/07\/FSBO_Partner_with_USME.jpg\" "\\"Market")
<\/span><\/div><\/div><\/div><\/div>Mineral owners do not realize how important competition is when it comes to selling mineral rights. When you sell mineral rights on your own, you nearly always sell far below market value. You may see $4,000\/acre and feel you got a great deal, but you didn’t realize there was a mineral buyer who would have paid $5,800\/acre.<\/p>\n
The only way to ensure fair market value is to partner with US Mineral Exchange. We will get your property in front of thousands of mineral buyers<\/a>. These mineral buyers will compete to pay you the highest market price. Already have an offer? If we don’t find you a higher offer we don’t make a dime!<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div>Factors Affecting Market Value<\/h2><\/div>Trying to determine what mineral rights might be worth is difficult. The reason is that there are many factors that affect market value. Any one of these factors may swing the value 5% to 50%+.<\/p>\n
Each mineral buyer will look at these factors. One mineral buyer may assume a long term price of oil at $50\/barrel and another assumes a long term price of oil at $60\/barrel. This single assumption would create a 20% difference in the offers!<\/p>\n
The reason it’s nearly impossible to estimate mineral rights value<\/a> is because of the factors listed below:<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div>- <\/i><\/span>\n
Oil Prices<\/p>\n<\/div><\/li>
- <\/i><\/span>\n
Natural Gas Prices<\/p>\n<\/div><\/li>
- <\/i><\/span>\n
Decline Curve Analysis<\/p>\n<\/div><\/li>
- <\/i><\/span>\n
Current Cash Flow<\/p>\n<\/div><\/li>
- <\/i><\/span>\n
Future Estimated Cash Flow<\/p>\n<\/div><\/li>
- <\/i><\/span>\n
Nearby Permitting Activity<\/p>\n<\/div><\/li>
- <\/i><\/span>\n
Nearby Rig Activity<\/p>\n<\/div><\/li><\/ul>
<\/div><\/div><\/div><\/div><\/div><\/div>- <\/i><\/span>\n
Operator of the Wells<\/p>\n<\/div><\/li>
- <\/i><\/span>\n
Mineral Buyers in the Area<\/p>\n<\/div><\/li>
- <\/i><\/span>\n
Local Regulations and Rules<\/p>\n<\/div><\/li>
- <\/i><\/span>\n
Pipeline capacity in the area<\/p>\n<\/div><\/li>
- <\/i><\/span>\n
Mixture of Gas and Oil<\/p>\n<\/div><\/li>
- <\/i><\/span>\n
Recompletion & Workover Potential<\/p>\n<\/div><\/li>
- <\/i><\/span>\n
Number of Additional Wells Possible<\/p>\n<\/div><\/li><\/ul>
<\/div><\/div><\/div>All of these factors can change the value of mineral rights by a significant amount.\u00a0 This makes it impossible to accurately estimate the market value of mineral rights. \u00a0 A lot of mineral owners waste time trying to find an answer that simply doesn’t exist.<\/p>\n<\/div>
<\/div><\/div><\/div><\/div><\/div>![](\"https:\/\/www.usmineralexchange.com\/blog\/wp-content\/uploads\/2020\/08\/CTA_2_2.png\")
<\/a><\/span><\/div>![](\"https:\/\/www.usmineralexchange.com\/blog\/wp-content\/uploads\/2020\/08\/CTA_mobile.png\")
<\/a><\/span><\/div><\/div><\/div><\/div><\/div><\/div>\nDeadly Market Value Mistakes<\/h2><\/div>Over the years we have seen mineral owners make a lot mistakes that end up costing them thousands of dollars. Figuring out the market value of mineral rights on your own is nearly impossible. A lot of mineral owners do their own research and think they have it figured out. In doing so, they sell far below market value and lose thousands.<\/p>\n
If you want to sell mineral rights for the highest price possible, avoid these deadly market value mistakes:<\/p>\n
Local Rumors:<\/strong> When you base the value of your property on local rumors you are setting yourself up for disappointment. The rumors that circulate locally are almost always referring to the most expensive and best property sold in the entire county. When a mineral owner is convinced their property is worth what everyone around them tells them they will likely never sell their mineral rights. Local rumors and what the market is actually willing to pay are two different things.<\/p>\nOutdated Information:<\/strong> Another common trap mineral owners fall into is believing their property is worth a certain amount because that\u2019s what they were offered a few years ago. The true market for mineral rights changes extremely rapidly. When the price of oil changes, the value of mineral rights can change dramatically as well. If you are basing the value of your property on what you were offered even a few months ago the value has likely changed.<\/p>\nNeighbors Property: <\/strong>When you value mineral rights based on what your neighbors property is worth, you can count on getting something entirely different. While it\u2019s true that your surrounding neighbors property should be valued approximately the same, there are still other factors. There factors include the timing, who is making the offer, your ability to negotiate, number of acres owned, whether you are leased, lease agreement terms, and many more. If you are leased at 12.5% and your neighbor is leased at 20% their property is worth a significant amount more than yours.<\/p>\nOnline Forums:<\/strong> Another unreliable source of information about the value of your property is forums. Mineral rights forums are filled with information that\u2019s extremely unreliable. These forums tend to be filled with a lot of opinion and very little fact. A lot of the information being discussed is out of date, coming from a 3rd party, and coming from people who talk about mineral rights in forums and don\u2019t actually participate in the market. Keep in mind that forums are a great place to learn more about your mineral rights. It\u2019s simply important to understand that gauging the value of your property from these discussions will lead you down the wrong path.<\/p>\nTeaser Offers:<\/strong> A lot of mineral buyers will send out teaser offers. The mineral buyer may have no intention of paying that price, but they want you to pick up the phone and make contact. Once they get you on the phone they will convince you to take a much lower price (based on the factors we listed up above). The worst part about teaser offers is they lead you to believe your mineral rights are worth more than they really are.<\/p>\nNegotiated Offer:<\/strong> This might be the mistake the costs mineral owners the most money. A lot of mineral owners get a handful of offers. They will pick out the highest offer and then negotiate that offer even higher. When you compare your lowest offer to the one you negotiated a bit higher, you convince yourself that you got a great deal. In reality, 95% of the time you are selling far below market value. Why? There were only a handful of mineral buyers competing. Even though you got the best price among those handful of buyers, you did not get fair market value<\/a>.<\/p>\nSatisfactory Offer:<\/strong> A lot of mineral owners will convince themselves they are happy with the mineral rights offer in hand. They will compare just a few offers and take the highest number. We ask them why they took that offer and they reply, “I was really happy with that number”. You may be happy accepting an offer of $100,000 because $100,000 is a lot of money, but what if you could have made $125,000 or even $150,000. Just because you are happy with the offer does not mean it is the best market price for selling mineral rights.<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div>Discovering and Maximizing Market Value<\/h2><\/div>If there is no way to accurately estimate market value, how do you determine what mineral rights are worth? Your mineral rights are worth what a mineral buyer is willing to pay today<\/strong> in a competitive bidding situation.<\/p>\nThe only way to determine the fair market value of mineral rights is to sell them in an open market. When you sell them in an open market, you get competitive bids. Each bid is another piece of information that helps you determine the market value of mineral rights. Once you have gathered bids from legitimate mineral buyers<\/a>, you then know what the current<\/strong> fair market value is for selling mineral rights.<\/p>\nThere are literally thousands of mineral rights buyers out there. A large number of mineral owners talk to a small handful of buyers. They then accept an offer far below market value. The mineral buyer heads to the bank with a huge smile on their face. They just made a huge profit at your expense <\/strong>because they bought mineral rights with little to no competition.<\/p>\nBy listing at US Mineral Exchange, you can discover the best market price for mineral rights. Our company gets your property in front of our huge network of qualified mineral rights buyers. These buyers will help you determine the true market value for your property. Interested buyers will submit bids for your property and help form a picture of what the market is truly willing to pay today<\/strong> for your property.<\/p>\nWe encourage you to learn more about US Mineral Exchange<\/a> and then list your mineral interest<\/a> for sale. There\u2019s no cost to list<\/a> and we lay out exactly what to expect after listing<\/a>. It\u2019s a risk free way to see what the true market value for mineral rights is.<\/p>\n<\/div>Contact US Mineral Exchange:<\/h2><\/div>If you have questions about the market value for mineral rights, we\u2019re here to help!\u00a0 We speak with mineral owners every day and we look forward to hearing from you.<\/p>\n
Please don\u2019t hesitate to fill out the form below with any questions and our friendly team will respond quickly.<\/p>\n<\/div>
<\/div><\/div><\/div><\/div><\/div><\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":3,"featured_media":5430,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[11],"tags":[],"class_list":["post-491","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mineral-rights-value"],"acf":[],"yoast_head":"\nUnderstanding Market Value for Mineral Rights in 2020<\/title>\n<meta name=\"description\" content=\"Trying to Understand Market Value for Mineral Rights? 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The market value for mineral rights is complex. There are many different factors that play a role. Every buyer evaluates your mineral rights differently. If you have received offers to sell royalties, you have probably seen a large difference between the offers.<\/p>\n
This makes the process of figuring out the true market value difficult for mineral owners. There is no Zillow<\/a> or Redfin<\/a> for mineral rights. There is no mineral rights appraisal service<\/a> that can give you an accurate market value.<\/p>\n<\/div> The market value of mineral rights is determined by what a buyer is willing to pay\u00a0TODAY<\/strong><\/span>\u00a0for your minerals.<\/span><\/p>\n<\/div> A lot of mineral owners fall into a common trap. They believe that their mineral rights may have more value in the future. We hear phrases all the time like, “When the price of oil goes up” or “When they drill a new well” or “Once they get that new pipeline in” and use this as justification for what their mineral rights might be worth in the future.<\/strong><\/p>\n If you are selling a home, the market value<\/a> is based upon what that home looks like today. You cannot sell your home above market value because it will be a lot better once renovations are done. You cannot sell your home above market value because the neighborhood will be much nicer in 10 years. Market value is all about the current value<\/strong> of your mineral rights.<\/p>\n<\/div> If you are like most mineral owners, you have been receiving offers to sell mineral rights.\u00a0 A lot of mineral owners sell far below market value because they assume their highest offer is the best market price.\u00a0 Do not fall into this trap!<\/p>\n The only way to sell mineral rights for fair market value is competition.\u00a0 When mineral buyers are forced to compete they must pay market value.\u00a0\u00a0 Many mineral owners gather up a few offers.\u00a0 These offers tend to vary a lot from the smallest to largest.\u00a0 Since the offers vary a lot, they see one number that looks way higher than the others.<\/p>\n If you see an offer for $2,750\/acre and then another for $4,000\/acre, the higher offer sounds way better!\u00a0 You must be getting fair market value right?\u00a0 Wrong! <\/strong><\/p>\n Even though your highest offer may be way higher than your lowest offer, it does not mean your highest offer is fair market value.<\/p>\n<\/div> Mineral owners do not realize how important competition is when it comes to selling mineral rights. When you sell mineral rights on your own, you nearly always sell far below market value. You may see $4,000\/acre and feel you got a great deal, but you didn’t realize there was a mineral buyer who would have paid $5,800\/acre.<\/p>\n The only way to ensure fair market value is to partner with US Mineral Exchange. We will get your property in front of thousands of mineral buyers<\/a>. These mineral buyers will compete to pay you the highest market price. Already have an offer? If we don’t find you a higher offer we don’t make a dime!<\/p>\n<\/div> Trying to determine what mineral rights might be worth is difficult. The reason is that there are many factors that affect market value. Any one of these factors may swing the value 5% to 50%+.<\/p>\n Each mineral buyer will look at these factors. One mineral buyer may assume a long term price of oil at $50\/barrel and another assumes a long term price of oil at $60\/barrel. This single assumption would create a 20% difference in the offers!<\/p>\n The reason it’s nearly impossible to estimate mineral rights value<\/a> is because of the factors listed below:<\/p>\n<\/div> Oil Prices<\/p>\n<\/div><\/li> Natural Gas Prices<\/p>\n<\/div><\/li> Decline Curve Analysis<\/p>\n<\/div><\/li> Current Cash Flow<\/p>\n<\/div><\/li> Future Estimated Cash Flow<\/p>\n<\/div><\/li> Nearby Permitting Activity<\/p>\n<\/div><\/li> Nearby Rig Activity<\/p>\n<\/div><\/li><\/ul> Operator of the Wells<\/p>\n<\/div><\/li> Mineral Buyers in the Area<\/p>\n<\/div><\/li> Local Regulations and Rules<\/p>\n<\/div><\/li> Pipeline capacity in the area<\/p>\n<\/div><\/li> Mixture of Gas and Oil<\/p>\n<\/div><\/li> Recompletion & Workover Potential<\/p>\n<\/div><\/li> Number of Additional Wells Possible<\/p>\n<\/div><\/li><\/ul> All of these factors can change the value of mineral rights by a significant amount.\u00a0 This makes it impossible to accurately estimate the market value of mineral rights. \u00a0 A lot of mineral owners waste time trying to find an answer that simply doesn’t exist.<\/p>\n<\/div> Over the years we have seen mineral owners make a lot mistakes that end up costing them thousands of dollars. Figuring out the market value of mineral rights on your own is nearly impossible. A lot of mineral owners do their own research and think they have it figured out. In doing so, they sell far below market value and lose thousands.<\/p>\n If you want to sell mineral rights for the highest price possible, avoid these deadly market value mistakes:<\/p>\n Local Rumors:<\/strong> When you base the value of your property on local rumors you are setting yourself up for disappointment. The rumors that circulate locally are almost always referring to the most expensive and best property sold in the entire county. When a mineral owner is convinced their property is worth what everyone around them tells them they will likely never sell their mineral rights. Local rumors and what the market is actually willing to pay are two different things.<\/p>\n Outdated Information:<\/strong> Another common trap mineral owners fall into is believing their property is worth a certain amount because that\u2019s what they were offered a few years ago. The true market for mineral rights changes extremely rapidly. When the price of oil changes, the value of mineral rights can change dramatically as well. If you are basing the value of your property on what you were offered even a few months ago the value has likely changed.<\/p>\n Neighbors Property: <\/strong>When you value mineral rights based on what your neighbors property is worth, you can count on getting something entirely different. While it\u2019s true that your surrounding neighbors property should be valued approximately the same, there are still other factors. There factors include the timing, who is making the offer, your ability to negotiate, number of acres owned, whether you are leased, lease agreement terms, and many more. If you are leased at 12.5% and your neighbor is leased at 20% their property is worth a significant amount more than yours.<\/p>\n Online Forums:<\/strong> Another unreliable source of information about the value of your property is forums. Mineral rights forums are filled with information that\u2019s extremely unreliable. These forums tend to be filled with a lot of opinion and very little fact. A lot of the information being discussed is out of date, coming from a 3rd party, and coming from people who talk about mineral rights in forums and don\u2019t actually participate in the market. Keep in mind that forums are a great place to learn more about your mineral rights. It\u2019s simply important to understand that gauging the value of your property from these discussions will lead you down the wrong path.<\/p>\n Teaser Offers:<\/strong> A lot of mineral buyers will send out teaser offers. The mineral buyer may have no intention of paying that price, but they want you to pick up the phone and make contact. Once they get you on the phone they will convince you to take a much lower price (based on the factors we listed up above). The worst part about teaser offers is they lead you to believe your mineral rights are worth more than they really are.<\/p>\n Negotiated Offer:<\/strong> This might be the mistake the costs mineral owners the most money. A lot of mineral owners get a handful of offers. They will pick out the highest offer and then negotiate that offer even higher. When you compare your lowest offer to the one you negotiated a bit higher, you convince yourself that you got a great deal. In reality, 95% of the time you are selling far below market value. Why? There were only a handful of mineral buyers competing. Even though you got the best price among those handful of buyers, you did not get fair market value<\/a>.<\/p>\n Satisfactory Offer:<\/strong> A lot of mineral owners will convince themselves they are happy with the mineral rights offer in hand. They will compare just a few offers and take the highest number. We ask them why they took that offer and they reply, “I was really happy with that number”. You may be happy accepting an offer of $100,000 because $100,000 is a lot of money, but what if you could have made $125,000 or even $150,000. Just because you are happy with the offer does not mean it is the best market price for selling mineral rights.<\/p>\n<\/div> If there is no way to accurately estimate market value, how do you determine what mineral rights are worth? Your mineral rights are worth what a mineral buyer is willing to pay today<\/strong> in a competitive bidding situation.<\/p>\n The only way to determine the fair market value of mineral rights is to sell them in an open market. When you sell them in an open market, you get competitive bids. Each bid is another piece of information that helps you determine the market value of mineral rights. Once you have gathered bids from legitimate mineral buyers<\/a>, you then know what the current<\/strong> fair market value is for selling mineral rights.<\/p>\n There are literally thousands of mineral rights buyers out there. A large number of mineral owners talk to a small handful of buyers. They then accept an offer far below market value. The mineral buyer heads to the bank with a huge smile on their face. They just made a huge profit at your expense <\/strong>because they bought mineral rights with little to no competition.<\/p>\n By listing at US Mineral Exchange, you can discover the best market price for mineral rights. Our company gets your property in front of our huge network of qualified mineral rights buyers. These buyers will help you determine the true market value for your property. Interested buyers will submit bids for your property and help form a picture of what the market is truly willing to pay today<\/strong> for your property.<\/p>\n We encourage you to learn more about US Mineral Exchange<\/a> and then list your mineral interest<\/a> for sale. There\u2019s no cost to list<\/a> and we lay out exactly what to expect after listing<\/a>. It\u2019s a risk free way to see what the true market value for mineral rights is.<\/p>\n<\/div> If you have questions about the market value for mineral rights, we\u2019re here to help!\u00a0 We speak with mineral owners every day and we look forward to hearing from you.<\/p>\n Please don\u2019t hesitate to fill out the form below with any questions and our friendly team will respond quickly.<\/p>\n<\/div><\/p>\n<\/div>Competition determines Market Value<\/h3><\/div>
<\/span><\/div>Factors Affecting Market Value<\/h2><\/div>
<\/a><\/span><\/div><\/a><\/span><\/div>Deadly Market Value Mistakes<\/h2><\/div>
Discovering and Maximizing Market Value<\/h2><\/div>
Contact US Mineral Exchange:<\/h2><\/div>