Once you have determined the value of selling royalties and whether you should sell royalties, it’s now important to know how to sell royalties. Selling your royalties is not too difficult but there are a few things you need to know in order to make sure the process goes as smoothly possible. We’ll help you understand how to sell your royalties in this article by explaining all the pieces you need to have in order.
Pay Stubs for Selling Royalties
There is one thing you will always be asked for when selling royalties and that is your most recent pay stubs. Your most recent pay stubs will answer almost every question a prospective buyer has. These pay stubs will let the buyer know how much you are receiving, the well(s) associated with the payments, who the operator is, and other key information they need to make an offer. When selling royalties, it’s important to have 3 to 6 months of your most recent pay stubs available so buyers can quickly evaluate your property and make an offer. Without pay stubs, you will likely have a very hard time getting offers and selling your royalties.
1099 for Selling Royalties
One other piece of information that helps buyers is your previous years 1099. A buyer will ask for a 1099 because it confirms the entire amount you have been paid in the previous year. While not as helpful as the pay stubs in determining the value, the 1099 will help them get more comfortable with the purchase. At the very least a 1099 will help the buyer become interested in purchasing your royalties.
Division Orders for Selling Royalties
Within an oil and gas company, the division orders department is responsible for determining ownership interest for wells the company operates. You may have received documentation from them confirming your ownership or explaining the amount you own. This documentation can be helpful to the buyer because it proves you owner the royalties. If you have any of this documentation available, it can be very helpful and should be provided.
Other Documentation
In addition to the royalties, you may also own mineral rights associated with those royalties. If you have a mineral deed or other legal documentation that shows what your ownership is, this can further complete the picture for the buyer. Any and all documentation you have may be helpful in getting a sale completed quickly.
We highly recommend getting all documentation you have scanned and ready to send so that you can get your royalties sold as quickly as possible when that time comes.
Where to Sell Royalties
Our article about where to sell royalties can help you navigate the process of where to sell, but our primary recommendation is to list your property with US Mineral Exchange. They have a track record of helping royalty owners get the highest price possible when selling royalties
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