Common Mistakes when Selling Royalties

Common Mistakes when Selling Royalties

Do you own royalties?  If so, bookmark this page because it’s jam packed with information you don’t want to forget.  When you sell royalties in Texas (or anywhere!) there are a number of things you should know and mistakes to avoid.   We will help you navigate the process of selling royalties from start to finish.  Most importantly, we will help you avoid the pitfalls that many royalty owners make!  If you want to sell royalties for maximum value, carefully consider each item listed below!

Rumors:  Probably one of the most common mistakes we see is believing every rumor you hear.  This one is especially difficult for royalty owners because they here a large number someone got, and now they won’t settle for anything less.   Let’s be clear, you should get every possible penny you can for your royalties.  However, the best you can get is the full market value for your property.   What is the full market value for selling royalties?  It’s the amount you could get today if every royalty buyer in the market knew about your property and submitted their best offer.

Where to Sell:  Other common mistakes when selling royalties is to work with a single buyer.  That’s a HUGE mistake.  Why?  When you only check with one or two buyers, you never know if they are really offering you the best possible price.   If you want to get the maximum value for selling royalties, we highly recommend that you list your property through US Mineral Exchange. There are a lot of reasons, but the most important is that they will connect you with a large network of buyers.  These buyers will then compete to pay the best price possible for selling royalties in Texas (or anywhere).     Don’t make the mistakes of visiting a few individual buyer websites and thinking your getting a good price.

If you want to get the maximum value for selling royalties, we highly recommend that you list your property through US Mineral Exchange.

Oil and Gas Prices:  Many mineral owners make the mistake of believing the oil and gas prices have little affect on their royalties.  The truth is that the value of oil and gas will play a big role in the value of selling royalties.   When oil and gas prices fluctuate so does the amount you receive in royalties every month.

Accepting the First Offer:  Got an offer to sell royalties?  Excellent!  Now relax and take a few minutes.  The WORST mistake you can make as a mineral owner is selling for less than it’s worth.  How do you avoid that?  By getting competitive bids!  You don’t want to sell the Ferrari pictured above after you’ve only talked to one buyer who’s in the market for a Ferrari do you?  No! You want to sell that Ferrari after EVERY buyer in the market has seen it and had a chance to make an offer.   Getting an offer to sell royalties is great because now you have a good idea of how much it could be worth.  Don’t be pushed into make a rush decision (big red flag).   Take your time an evaluate all your available options.

Documentation:   If your like most royalty owners, you get your checks in the mail and throw away the check stub.   Probably don’t need it right?  Wrong!  If you want to sell royalties, you need to hold onto those check stubs!  The very first thing a buyer is going to want to look at are those check stubs.  Ideally you should keep at least 6 months of check stubs handy.  Up to 2 years would be very valuable.    In addition, your previous year(s) 1099 can also be very helpful.  If you have you 2012, 2013, or 2014 1099 that shows the total you received each year, buyers can use that information to make better offers.   Want to really knock it out of the park?  Have your mineral deed and lease agreement handy.   If you were selling a Ferrari you’d get a lot more money if you have everything properly documented.   Selling royalties is the exact same way!  If you want to be paid a Ferrari price, keep your documentation!!! 

Ferarri

Not Seeking Help:  Last but not least, if you are new to the process of selling royalties, don’t be afraid to reach out and ask question or get help.   Selling royalties is more difficult if you simply talk to a couple buyers and accept the first offer that comes your way.

Questions about Selling Royalties

If you have questions about selling royalties, fill out the form below.  We’ll give you honest feedback and help answer your questions!

Questions about Selling Royalties:

Your Name

Your Email

Phone

Average amount you receive each month:

Is the property leased?:

Questions or comments: