Thinking about selling mineral rights in Texas in 2022?

At Texas Royalty Brokers, we can guide you through the entire process of selling mineral rights in Texas.  We’ll ensure you get the absolute highest price and make the process simple.

There are a lot of things to consider. We are going to break down everything you need to know to sell mineral right in Texas.

Timing the market is nearly impossible. There is never a perfect time to sell mineral rights in Texas.  It most cases, it really comes down to where you are personally.

If you look at the last 20 years of oil prices, 2022 is going to be an exceptionally good time to sell mineral rights.  We would have to go all the way back to 2014 to see sustained prices over $60/barrel.

A lot of mineral owners we talk to are concerned about prices skyrocketing to over $100/barrel.  These mineral owners are concerned that if they sell now, they will miss out on higher prices.

In the past 20 years, oil has only moved above $100 a few times.  Each time it has quickly dropped back down below $80 within a few months.  As soon as oil hits $100/barrel there are countless operators that begin drilling because it’s extremely profitable.  This floods the market with oil causing the price to go back down.

If you’re concerned about timing the market, 2022 is the best time to sell mineral rights in Texas since 2014.

There are a lot of different reasons to consider selling mineral rights.  Some of the reasons to sell mineral rights include:

• Simplify your Estate
• Qualify for Medicaid
• Financial Need
• Pay off Debt
• Pay for School
• Starting a Business
• Helping a Family Member

Deciding whether to sell mineral rights is a personal decision.  There is no right or wrong reason for selling mineral rights.

While all of the reasons above are valid reasons to sell mineral rights, there are two more reasons for selling mineral rights that every mineral owner needs to consider:

If your mineral rights represent more than 5% of your net worth, and especially if your mineral rights represent more than 10% of your net worth, you should sell.

Why?  Most people own mineral rights in a single location.  If you get stuck with a bad operator, if new wells are drilled next to your acreage that start depleting your oil and gas, if a dry hole is drilled in the area, if a new technology makes your acreage less desirable, etc etc etc you may find the value of your mineral rights going down dramatically.

The old adage to “never sell mineral rights” is terrible advice.  For many, it makes sense to sell mineral rights and put that money to work in the stock market.  You’ll be better diversified and you can start earning dividend income that compounds the value of your investments.

If you own mineral rights in Texas and they are in a good location, you should be getting offers to sell mineral rights in the mail.  If you are in a really good location and you have a lot of royalty income, you may be getting offers to sell minerals on a weekly basis.  Some mineral buyers will even take the time to locate your phone number and call you directly.

There are four types of mineral buyers who will contact you with letters in the mail:

• Low Ballers:  If you have ever received an offer in the mail that was substantially lower than the other offers, this was a low ball offer.  These mineral buyers are hoping that you’ll sell below market value.  They will attempt to make the process very easy.  Some will include a mineral deed with the offer. By making things simple, they hope you’ll sell far below market value.
• Teasers: Some mineral buyers will throw out teaser offers.  These offers use language like “Up to $30,000 acre in your area.”  Any time you see the words up to this is not a real offer.  This is a buyer who simply wants you to see a large number and pick up the phone.
• Flippers:  These “mineral buyers” are not actually buyers.  In fact, most do not have any cash at all.  Their goal is to put you under contract at any price, then find someone to pay a higher price.  It’s important to understand that these flippers will misrepresent themselves.  They will tell you point blank they are buyers.  At the very end they will bring in a “partner” who is the actual end buyer.  If they do find you a buyer, you sold way below market value.  If they don’t find you a buyer, they wasted all of your time.
• Quality Buyers:  A very small percentage of offers you get in the mail are from reputable buyers.  Some very high quality buyers do send offers in the mail.  Well over 95% of the offers you get in the mail will not be high quality buyers.  More importantly, only a very small percentage of quality mineral buyers send letters in the mail.  Sending letters is time consuming and not cost effective.  Most high quality mineral buyers rely on Texas Royalty Brokers to locate deals and bring them to market where they can bid on them.

If you are getting offers to sell mineral rights in Texas, do not accept any offer until you get competitive bids.  A lot of mineral buyers will compare a few offers they got in the mail, and take the highest offer.  This is a huge mistake.

Just because you have one offer that is higher than the other offers does not mean it’s a good deal.  There are thousands of high quality mineral buyers who want to make a bid.  You will get a much higher price when you create a bidding war for your mineral rights.

The number one mistake mineral owners make when selling mineral rights in Texas is not using a mineral rights broker.  Without an experienced broker who knows the industry, you simply can’t reach enough buyers to get a fair price.

When you sell mineral rights in Texas on your own you are almost always going to sell below market value.  Why?  There is no competition.  You’re allowing 2 or 3 mineral buyers to compete for you minerals when there are thousands of mineral buyers.

Finding an offer to sell mineral rights is easy.  Finding the absolute highest possible price from a reputable mineral buyer is the hard part.

A lot of mineral buyers in Texas have made a fortune reaching out directly with offers.  Most mineral owners will talk to 2 or 3 mineral buyers.  They negotiate the best price they can, and then sell.   These mineral owners don’t realize that they could have walked away with substantially more had they simply gotten competitive bids.

Let’s say you have an offer for $1,200,000.   You negotiate them up to $1,300,000 and you had some offer offers that were a $1,000,000 and lower. Seems like you got a good deal right?  You negotiated $100,000 more!

What many mineral owners don’t realize is that competition could have increased the value even higher.  If you found an offer for $1,300,000 on your own with a just a handful of buyers, imagine what the price would be if thousands of mineral buyers had an opportunity to bid?

It is extremely common for mineral owners to come to us with an offer they have already negotiated higher.  We’ll then hit the market and typically see a 10% to 30% price improvement over their existing offer.   If you get a 20% price improvement on a $1,300,000 offer, you just made an extra $260,000!

Competition is crucial when selling mineral rights in Texas.  You absolutely must get competitive bids or you are nearly always selling below market value.

If you are thinking about selling mineral rights in Texas, we can help.  The team at Texas Royalty Brokers has been helping mineral owners get maximum value for selling mineral rights since 2012.

At Texas Royalty Brokers, we focus exclusively on high value mineral rights sales in Texas.

Focusing on high value deals in Texas allows us to provide clients with the following benefits:

• Quality Listings:  Some mineral brokers focus on quantity, not quality.  At Texas Royalty Brokers we are focused on high quality listings.  This allows us to put 100% of our focus on the limited number of listings we are actively marketing.  In addition, mineral buyers know that we bring the best deals to market.  This attracts the best mineral buyers ensuring that you get the absolute highest price when you sell.
• Local: By focusing exclusively on the state of Texas, our team can more effectively market your mineral rights to ensure the best price.
• Communication:  When you contact Texas Royalty Brokers, we will respond quickly.  Our focus on quality over quantity means our team is available to answer your questions and keep you up to date on your listing.

Our team is eager to answer your questions and help you better understand your mineral rights.

If you are considering the sale of mineral rights in Texas or simply have questions, reach out to us using the contact form below.  One of our team members will quickly be in touch.