Trying to find mineral rights buyers? If you do a quick google search, you’ve probably seen thousands of websites offering to buy mineral rights. As a mineral owner, you are confronted with the following questions when you are trying to find mineral rights buyers.
- How do I find mineral rights buyers?
- Is this buyer legitimate?
- Who can I trust?
- Is this really a fair offer?
While you can find thousands of mineral rights buyers out there, finding the right buyer is critical to getting the best possible price. The reason is that not all buyers are created equal. The value of your mineral rights is going to depend on your finding the buyer who can pay the highest possible price.
Before we begin, it’s important to understand that to get maximum value you have to get your property in front of a huge number of buyers. As we discuss each type of buyers below, we recommend you use caution because you are working with a single buyer. Working with single buyers is almost never the best way to get the highest price. You want your property in front of a large network of buyers so they can bid against one another which drives up the price. Keep this in mind as you learn about each type of buyer.
After spending years in the industry, we are going to break down all the different mineral rights buyers you will meet. This guide will help you understand which buyers to avoid and which ones to work with.
Flippers: Use Caution!
One of the worst things you can do when you sell mineral rights is to put your property in the hands of a flipper. What is a flipper? A flipper is someone who has no intention of purchasing your mineral rights. They set up a website (or work offline locally), and pretend to be a buyer. They will say all the same things a real buyer would. They will act as if they are the ones purchasing your property. There are two key signs you are working with a flipper:
1. They will try and pin you to the lowest possible price and get it in writing
2. They will request an extremely large amount of time for due diligence (usually 60+ days)
What’s happening here is when you sign the agreement, they turn around and find someone willing to pay a higher price. Let’s say they get you to agree to sell at $1,000/acre. They then turn around to someone else they know (a real buyer) who is willing to pay $3,000/acre. They then assign the contract over to the real buyer. They pocket $2,000/acre while you get $1,000/acre. Do you see what happened there? They basically robbed you of all the value your property had by getting you to agree to sell at a price far below market value.
Letters in the Mail: Use Caution!
If you received a letter in the mail offering to purchase your mineral rights, use extreme caution. Many of these buyers prey on people with little to no knowledge of oil and gas. Their main benefit is that they make the process extremely simple. They send you a letter and some documents to sign, and before you know it you’ll have sold your mineral rights. The problem is that you are only working with a single buyer. Worse, since they are sending a letter to your home they assumed you aren’t checking the internet and aren’t informed about the actual value of your property or finding other buyers.
Local Brokers: Use Caution!
Once in a while you will stumble across a local broker that is really out there to do the right thing and help you out. This broker will get your property in front of a number of real buyers he knows and try to get you the best price. Usually this broker will get a cut of the deal from the buyer for sourcing the deal for them. While it is possible for you to get a decent price working with a local broker, we are hesitant to recommend them for a few reasons:
- Local brokers usually know local buyers. This means their network is not as large, so you may not get a true fair market value. Mineral rights buyers come from all over the United States. There are buyers in states far outside of yours that know way more about the area’s oil and gas than many local brokers ever will.
- Local brokers can take a large cut of the deal. Local brokers could almost be considered flippers, but instead they get you in touch with a buyer and take a mark up. If you work with a local broker, ask them how they are paid and what % of the deal they get. Anything more than 10% is highway robbery. Really, 6% is a fair commission for a broker.
We Buy Minerals Websites: Use Caution!
A quick google search and you’ll find thousands of buyers out there offering to buy your mineral rights. The problem is that you don’t know who you are working with. Are these guys flippers? Is it a local broker? Is it a company that has a bad reputation? Regardless of what type of buyer you stumble across, there’s one thing we can tell you about we buy minerals websites. 99% of them are individual buyers or flippers. What does this mean? It means you are either going to get taken advantage of, of you are going to be working with just a single buyer.
Forums: Use Caution!
Forums are a great place to learn on the internet. You can quickly talk with other mineral owners and ask about different companies or resources. However, we recommend you use caution on forums for 2 reasons:
1. Many buyers are active there. They sift through the websites and will make offers to purchase or to contact you. Again, how do you know who these people are? You are also working a single buyer.
2. Just as important, rumors spread like wild fire on forums. You’ll read all sorts of information about mineral rights selling for 15K/acre. You’ll get excited as you pull out your calculator and multiple your acres X $15K and dream about the next home you’ll buy. Don’t fall for this common mineral owner mistake. These are extreme examples, and some of them are simply rumors. Your mineral rights are worth what the market is willing to pay today for them, nothing more, nothing less.
US Mineral Exchange: Our Recommendation
If you want to find quality mineral rights buyers, we recommend listing your property on US Mineral Exchange. Why? We’ve talked with mineral owners from all over the United States who had a positive experience with them. The reason mineral owners prefer US Mineral Exchange is that they get your property in front of a huge network of buyers. This leads to receiving multiple offers and making sure that you get a fair market value when you sell. You’ll be working with the top mineral rights buyers in the country who can afford to pay you the highest possible price for your property. Just as important, US Mineral Exchange does not purchase mineral rights. This means they are actively working to get you the highest possible price, not the lowest one.
Additional Resources: Below are some additional resources for further reading:
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- Mineral Rights Value
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- Understanding Market Value of Mineral Rights
- + Any other questions related to mineral rights!
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