Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I'm under contract. We asked to retain our mineral rights. The buyer nearly walked away from the table. So I offered him the mineral rights in return for leasing the house back to me free of charge for a month after closing (so kids can finish school)
Basically I get $1300 worth of credit in exchange for mineral rights that haven't made a dime for me except that measly leasing bonus over a year ago.
So basically, it sounds like your situation has validated my fears and concerns. I have no illusions of making money off the mineral rights...my only concern is that I'll have trouble selling the house in the future, because nobody wants to buy into a situation where some 3rd party owns a piece of your property. Which is exactly why your buyer almost backed out.
Let me put it to you like this. Lets say the mineral rights have been in the possession of some other family since 1910. (It could happen) And the home you want to buy sits on this land. Would you be detered from buying the house?
You want the mineral rights because you can get them from this guy in the same deal with your house. They aren't owned by some obscure intity on the other side of the planet. They're owned by this guy who lives in the house he's trying to sell.
Do you get what I'm trying to say? You want them because they are within reach. If they weren't then you wouldn't care. There are soooo many properties these days that do not come with mineral rights and the people that live there don't even know it.
Nobody looks for houses based on whether they come with mineral rights, and up until a couple years ago, nobody gave a damn either way. But now that there's all this drilling for gas going on, it's become a hot topic.
Whoever owns those rights, gets to decide if and how the oil/gas companies are going to extract the stuff from under your house. This makes many people, including myself, pretty uneasy.
Also, there is money involved, which always complicates things more. Whoever owns those rights is going to potentially be making money off of them...possibly at the expense and inconvenience of the guy who owns the surface rights.
From a buyers perspective, there is simply nothing good that can come out of a situation where the seller keeps the mineral rights...only bad can come from this situation.
If it's such a non-factor that makes no difference, then why did you want to keep them in the first place?
I, as the holder of the mineral rights, have the potential to make money off of it. I was there first and got the rights way before you even thought about buying my property. If you want them you are going to have to pay for them. I'm taking my knocks selling my home in this crap market. This is the only lever I have to pull. So there you go.
When you go to sell let's see how you feel about wanting to keep them.
Let me put it to you like this. Lets say the mineral rights have been in the possession of some other family since 1910. (It could happen) And the home you want to buy sits on this land. Would you be detered from buying the house?
You want the mineral rights because you can get them from this guy in the same deal with your house. They aren't owned by some obscure intity on the other side of the planet. They're owned by this guy who lives in the house he's trying to sell.
Do you get what I'm trying to say? You want them because they are within reach. If they weren't then you wouldn't care. There are soooo many properties these days that do not come with mineral rights and the people that live there don't even know it.
There is definitely some truth to what you're saying. I agree that it wouldn't be a big deal to me if the mineral rights were sold off decades ago to some unknown entity. And this is the case with many properties around D/FW.
However, the unknown, long lost owner of those rights, isn't waiting in the wings to sell your property off to the gas companies...which is the precise intention of the current owner.
The current owner knows they can make money by whoring out your land to the oil/gas companies, which is exactly what they plan on doing.
I've also found that in many D/FW subdivisions and neighborhoods, the homeowners all own the property rights. This is typical for residential areas, where the plots of land are around 1/4 acre. I don't want to be the only guy in the neighborhood who can't sell these rights with the house, because it will bring my property value down. I also don't want to be the only guy in the neighborhood who doesn't get to vote, when the neighborhood association meets to vote on whether or not to allow a drilling rig to be put in across the street.
It didn't used to be a big deal, but as more and more drilling occurs...it could end up being a major factor in the future of home sales.
But you do make a valid point, and I understand what you're saying. Hopefully you can understand my point of reference too.
Whoever owns those rights, gets to decide if and how the oil/gas companies are going to extract the stuff from under your house. This makes many people, including myself, pretty uneasy.
This isn't entirely true. I did not have to lease my mineral rights to this company. But that's not going to prevent them from extracting minerals from beneath me. Especially if it's gas. If all my neighbors signed the lease then what prevents these folks from drilling under my property and extracting minerals? Nothing.
Hopefully you can understand my point of reference too.
I understand your point of reference completely. You are the buyer in a crap seller's market and a good energy $ market. Naturally you want the house for 5% undervalue (which seems to be the trend around DFW right now) and the mineral rights too.
I'm telling you that if you want the home then you need to be prepared to pay this man for rights. Which probably means paying full value for the home. That's probably all the guy wants...to not get screwed by the market and he's using mineral rights as leverage to get his asking price...and maybe a little more.
That's certainly all I wanted. If my buyer would have come and offered me my asking price I probably wouldn't have thrown the mineral rights into the mix. I would have just given them up. But instead I used them as leverage to squeeze about $1300 out of the deal. That's probably more that they will ever make off of them. It's a military family and they will probably move on in a couple of years anyway. Then they will probably try the same trick I did.
Who the hell looks for houses based on whether or not they come with mineral rights????
I guess we were probably looking at places with larger acreage than a typical residential house, but to answer your question -- WE DO! No mineral rights = No Go. Or an offer for maybe 10% of the price. You pick.
Considering the damage possible, if you want to keep the mineral rights and the license that carries to destroy the surface -- keep the whole thing. But rather than argue with you as a seller, we would just pass you by.
btw, as fall as prices falling and getting screwed -- you might ought to unload it anyway you can before the Texas market starts going downhill, too. Even the Park Cities are cracking, now. This could become an ugly time to be sitting on property you want to sell.
I guess we were probably looking at places with larger acreage than a typical residential house, but to answer your question -- WE DO!
Well obviously. If you're looking at 10 acre lots then sure you want them. Because there is a chance that your lot may be large enough for the actual rig to be located. And you sure don't want a drilling rig in you front yard.
The OP and I talking about 1/4-1/2 acre lots. A drilling rig itself would need a 1/4 acre. And they can't just buy a lot and drill in the middle of a neighborhood. They have to be greater than 600ft away from the nearest residence. So all this talk about them messing up your yard is silly. We can't even see where the rig is going up from our house. And the buyer would still have surface rights. They couldn't just go tracking into his yard digging holes. No way.
I'm under contract to sell so don't worry about me.
For the record I can't stand these oil and gas industry guys. They would drill in your front yard if it wasn't illegal and they thought it was profitable.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
