Mineral Rights Auction

Mineral Rights Auction

When a mineral owner decides to sell mineral rights, they may consider a mineral rights auction.  Auctions are a great way to quickly get a property sold.  However, when it comes to mineral rights an auction is not typically the way to go.  This guide will help explain why a mineral rights auction may not be in your best interests and provide you with a better option.

Mineral rights auction concerns

When you put your mineral rights up for auction, there are three primary concerns:

  1.  Visibility
  2.  Negotiation
  3. Limited Time

Visibility –   An auction can be a great way to sell property.  If you list a baseball card on Ebay, you know that it will be seen by thousands of people all over the country.   When it comes to mineral rights, you want to make sure that if you put your property in a mineral rights auction it will be seen.   A lot of mineral rights auction websites don’t actually show any property.   If you want exposure to thousands of buyers the property needs to be visible to buyers.    Auctions only work when the bidding process is public.  This allows buyers to see the current bid and encourages them to bid higher.  This competition is what makes auctions work so if the pricing and bidding isn’t public, it’s not really a mineral rights auction.

Negotiation – A lot of the value in the sale of mineral rights comes through negotiations.   Every property is unique and so is every buyer.  With mineral rights it takes a hands on approach to negotiate the best possible deal for you, the mineral owner.   How many days does the buyer have to close? What if they only want to purchase a portion of your property?  Who gets the most recent royalty check in the sale?  Mineral rights are complex and the sales process is to.  A mineral rights auction doesn’t typically make sense because there are too many items to negotiate/factor into the sale.

Limited Time:  How long should a mineral rights auction be set for?  Depending your property that answer can vary a lot.   If you have a very good property that has a lot of demand, waiting 30 days for offers to come cause some buyers to lose interest or drop out.     Buyers want to move quickly on good properties.  On the flip side, if your property is not in the best location, it may take some time to find the right buyer who can pay the highest price for your property.   Putting a set time limit on a mineral rights auction could cause you to sell below market value.   Every property is unique and needs to be marketed accordingly to ensure the best price.

As you can see, a mineral rights auction is typically not the way to sell mineral rights.

Our Recommendation

Our recommendation to sell mineral rights is to list your property at US Mineral Exchange.   The reason is that by listing at US Mineral Exchange you get all the benefits of an auction and none of the negative parts.   When you list your property at US Mineral Exchange it’s like putting your home on the MLS.  It’s visible to thousands of buyers all over the United States.  You aren’t locked into selling at a specific time or a specific price, and they will work hard to negotiation you the best possible deal.   You’ll be working with experts in the sale of mineral rights and they will quickly get your property out in front of thousands of buyers.

If you are thinking about a mineral rights auction we strongly suggest you consider other options.  Regardless of how you sell mineral rights, avoiding a mineral rights auction is nearly always in your best interests.

Questions about selling mineral rights?

If you have questions about selling mineral rights, contact us.  We talk to mineral owners every day and we look forward to answering your questions.

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