The Benefits of Selling Your Mineral Rights

Posted by on Jun 26, 2017 in Mineral Rights | 0 comments

Mineral rights, also known as mineral estate, refer to the legal rights of a land owner to sell, lease, bequeath or give as a gift the minerals found on or beneath his or her piece of property.

To a land owner, the decision to either lease or sell his or her mineral rights will need to be considered exhaustively to make sure that he or she will never regret whatever decision he or she makes. For while some caution others never to sell since the amount of profits that they will get through leasing their mineral rights will eventually equal or even exceed the amount offered in a sale, others, rather, decide to sell as the idea of leasing is much riskier than selling.

This is because selling guarantees sure, immediate and substantial cash, which is often more than enough to last the owner and his or her family for many years. It will also save the owner from significant tax increases, which he or she will have to keep paying if the rights were only leased.

Before making an actual decision, though, it is necessary that the land owner understands all the advantages, and possible risks and consequences of selling his or her mineral rights.

An article posted in a website called The Mineral Auction, there are eight steps those who wish to sell their mineral rights ought to observe:

  1. 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?
  1. Learn about the legal requirements for selling. This step might also involve encountering or generating legal descriptions, leases, and check stubs.
  1. 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.
  1. 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.
  1. 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?
  1. 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.
  1. The buyer will present a deed before closing, another legal document that finalizes the sale.
  1. 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.

 

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