buying a house in ft worth. seller wants to keep mineral rights (for sale, leasing)

[Eric Fred Norris]

as i imagine most sellers in the area would. is it worth paying him a premium of 2-3k to get the mineral rights? the house is 130k, he's already been paid the signing bonus. the only positives for me purchasing them are

1. payment of a bonus if the driller picks up the option
2. royalty payments
3. some say over how the drilling is to be done near my property

[rugerjitsu]

1. find out when the lease expires, and if there's an option to extend beyond primary term.
2. find out if the wells have been drilled
3. find out if royalty payments are being paid at this time
4. find out how he's calculating his "$2-3K" premium to get the mineral rights, this should be interesting, unless he's already getting royalty payments.
5. find out where the drill site is...how close to your home?


these are questions you need to know before moving any further with negotiating the mineral rights...get back at me when you find some answers, and maybe i can help more.

[derekv]

Originally Posted by Eric Fred Norris

as i imagine most sellers in the area would. is it worth paying him a premium of 2-3k to get the mineral rights? the house is 130k, he's already been paid the signing bonus. the only positives for me purchasing them are

1. payment of a bonus if the driller picks up the option
2. royalty payments
3. some say over how the drilling is to be done near my property

Are you purchasing a typical tract house of about 1/4 acre or so? If so he seems to be overvaluing the royalty.

The previous poster lists some good questions to answer and then we can provide some additional help.

[loves2read]

agree that the price of the house indicates that there is not lot of land with it--
not likely to see more than 100 a month on a good well from that % of royalty interests
and frankly you have just as much say on that type of lot whether you own minerals or not--

he is overvaluing the minerals--especially since he has gotten the signing bonus--
his realtor probably has no clue about o/g leasing

[rugerjitsu]

Originally Posted by loves2read

agree that the price of the house indicates that there is not lot of land with it--
not likely to see more than 100 a month on a good well from that % of royalty interests
and frankly you have just as much say on that type of lot whether you own minerals or not--

he is overvaluing the minerals--especially since he has gotten the signing bonus--
his realtor probably has no clue about o/g leasing

i agree...the thing is, if wells haven't been drilled yet, royalty payments are purely speculation.

i would also agree that $100/month would be in the neighborhood, but most likely in the upper end...and royalty payments don't last forever.

and yes, most realtor's i've spoken with in the area are clueless about o&g leasing...they just see $$ signs. i think the owner is correct in using mineral rights as a negotiating tool, but you need to educate yourself and make sure you know EXACTLY what you're getting into before signing anything...

[GrapevineTxOnline]

Isn't this a buyers market?

Mineral rights to me are a deal breaker. They should be included or I personally will look for another house.

Did he ask if he could keep access to the master bathroom as well?


I think I would just say, "Hey, you can include the mineral rights and sell the house or I'll keep looking and you can find another buyer."

You should probably be more polite than I would be.

[Squirl]

I wouldn't buy a house w/o getting the mineral rights. Buyers market here and lots of properties for sale.......

[rugerjitsu]

just sold my home in arlington, on 0.25 lot in a subdivision, and i reserved the minerals. most likely the buyers weren't educated, no negotiation needed.

i wouldn't say it would be a deal breaker to me in buying a new home...if anything, it would be a negotiating tool for me to get a better deal on the home, if i really liked it.

[nsumner]

The funny thing is that in most if not all the new developments around DFW the developers are keeping the mineral rights. They are not even passed on the builders. Most people assume that they own the mineral rights because whent hey purchased, it wasn't an option.

I personally always recommend to buyers to pass on any house where the seller wants to keep the mineral rights. In the long term, it is the buyers that will have to deal with a rig in their backyard and they don't get squat from putting up with that. If you sell, sell the whole thing or just rent it.

Naima

[CzechGrazer]

Almost all homeowners who have bought new homes in the last 5 years don't own the mineral rights (the developer probably holds them, if the rights even made it that far down the line). Many, many olders homes also do not have mineral rights. All the posters trying to play tough "I won't even consider buying without mineral rights" etc etc.... does that mean you do not plan on ever buying a new home? Also, even on used homes there are many many homes where the seller does not have the mineral rights. I think it's comical you tell the OP how to play hardball and lose buying a house they love over something that is EXTREMELY common.

also, previous numbers in thsi thread indicate minreal rights income to be close to $100 a month and the seller estimates that is worth $2k-$3k.... how is that not a reasonable estimate? Seems reasonable to me.

Like everything else, everything is negotiable.... but what the seller is doing is not at all uncommon.