Never Accept an Offer Without Shopping Around
The single biggest mistake mineral owners make when selling mineral rights is accepting an offer without contacting enough potential buyers. It is extremely unlikely that the first offer you receive will be the best possible offer. Because virtually every mineral buyer will calculate a different value for your minerals, there is a high probability that you are leaving money on the table if you don’t run a comprehensive search.
(You might also find our Mineral Rights Price Index interesting. Updated monthly, our Mineral Rights Price Index tracks the monthly price changes for mineral rights in West Texas and North Dakota, Wyoming, and Colorado based on hundreds of data points for actual transactions in these areas.)
The Perils of Running Your Own Search
If you own minerals in a good area, you probably receive unsolicited letters offering to buy your minerals. You might think that, by negotiating with each of those letter-writers, you will receive a good offer. And you might. But how do you know that someone else, a buyer you didn’t talk to, wouldn’t have paid more?
Missing the Highest Offer – a Case Study
The chart below illustrates how mineral owners commonly leave money on the table when they sell their minerals on their own. Unfortunately, this happens all-too-frequently when mineral owners solicit bids for their property on their own.
- The colored bars in the chart above represent the offers that the mineral owner receives from the buyers that the mineral owner contacts.
- The light grey bars represent the bids that the mineral owner could have received from other buyers, if the mineral owner had contacted them.
- Many of the bids the mineral owner receives are from lowball bidders or flippers and are unattractive.
- The mineral owner does get one bid that is clearly superior to the rest (the green bar). While it is unquestionably a good bid, it is still substantially below the bids that the mineral owner could have received by contacting the right buyers.
Money Left on the Table
The end result is that the mineral owner gets a very good price but still leaves a substantial amount of money on the table.
Real Life Example – Loving County Mineral Owner
Less than a year ago, Greg, who owned about 78 net mineral acres in Loving County, Texas, reached out to us. Over the course of the next two months, Greg spent many hours exchanging emails and calling a wide range of mineral buyers. Greg negotiated aggressively and, after a lot of hard work, was able to get an offer that seemed extremely attractive – $1,482,000.
Shale Marketplace Found a (Much) Higher Offer
Before signing up the deal, Greg contacted Shale Marketplace with his top offer in hand to see if we could do better. Shale Marketplace reached out to many mineral buyers with an interest in Loving County, Texas. In less than 30 days, Greg had signed a Purchase and Sale Agreement with a buyer found through Shale Marketplace for a purchase price of $2,028,000, more than half a million dollars greater than what Greg was able to find on his own.
If you are thinking about selling minerals, don’t sell for an unfair price. Contact Shale Marketplace to see how we can help you get top dollar for your minerals and royalties. Our service is 100% free to mineral owners, and so you have nothing to lose.
Please also read our Mineral Owner Guide, which will help you better understand best practices for selling your minerals.
Helpful Resources for Mineral Owners
- Mineral Rights Price Index – Track Monthly Changes in the Value of Mineral Rights
- Mineral Owner’s Guide – How to Sell Your Mineral Rights for the Highest Price Possible
- “How Much Are My Minerals Worth?”
- How to Find the Highest Offer for Your Minerals and Royalties
- What Do I Own? Understanding the Differences between Minerals, NPRIs, and ORRIs
- Mineral Flippers – Who They Are and How to Avoid Them
- How to Get the Most Money for Your Mineral Rights and Royalties
- How Selling on Shale Marketplace Works
- Frequently Asked Questions about Selling