In Texas, it is very common to buy real estate that does not include the mineral rights.
This is because oil and gas mineral rights are well known in the state of Texas and sellers typically retain their mineral rights. Over the years, as individuals have sold their land or real estate, they have retained the mineral rights when they sell. In addition, savvy developers will purchase land and then deed the parcels off without the mineral rights. In this way, many sellers retain the mineral rights when they sell real estate or land.
When mineral rights ownership is separated from the surface, this is known as severed mineral rights. Severed mineral rights become a new ownership that can be bought or sold separate from the surface.
Buying land without mineral rights
Is it ok to buy land that does not include the mineral rights? Yes! As a surface owner, you will still benefit from some of the situations we described above if they do drill for oil and gas in your area. There is little to no downside in buying land without mineral rights. You simply need to understand what rights you do and don’t have.
Buying a home without mineral rights
Should you buy a home without mineral rights? Yes! There is nothing wrong with not owning the mineral rights related to your home. This is especially true if you are in a typical neighborhood. You will never notice the difference. The only thing you won’t get is royalty income if they extract oil and gas from beneath your home. Not owning the mineral rights does not negatively effect the value of your home. If your home came with mineral rights, it would be worth more than the market value of the house itself as the mineral rights have their own value.
Should I retain mineral rights when I sell?
It depends. There is a value to your land / house, and there is a value to mineral rights. As a general rule of thumb, the person who wants to purchase your land / home will pay less for mineral rights than they are worth. On the flip side, the person who wants to buy your mineral rights will pay less for your land / home than they are worth. You should attempt to retain your mineral rights when you sell land or a home, and then sell the mineral rights in a separate transaction.
The only exception is if you are in an area that is not productive for oil and gas. In this case, someone may pay you a premium for the mineral rights which have little to no value. Contact us for a free consultation to find out if selling your mineral rights with your land / home makes sense or if retaining the mineral rights and selling separately makes more sense.