Home Buying in 76039>Question Details

Travis Chris…, Home Buyer in 76051

Can a home seller keep their mineral rights w/o telling a home buyer?

Asked by Travis Christman, 76051 Sun Oct 12, 2008

Can a home seller keep their mineral rights w/o telling a home buyer? If so, is it prudent for the home buyer to ask for lower price?

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Chris Tesch’s answer
Travis, the only way mineral rights will stay with the current seller is through specifically excluding them from the sale. If the mineral rights were previously sold, which is extremely likely, then you wouldn't see it on anything but the title committment. As far as the price, if it's a subdivision tract then it's very unlikely that any of the comparables have mineral rights as well, so typically no lowering is warranted. If this is a 50 acre tract of land then it could be a point of dispute.

Your best bet is to ask specifically about the mineral rights and spell it out in a contract as to who will receive them. Ask your agent to ensure this goes into the contract and ensure that the title company follows up on it. In general, however, most of the royalty checks I've seen people get are for less than $100 a year.

Good luck!
Web Reference: http://www.ChrisTesch.com
2 votes Thank Flag Link Sun Oct 12, 2008
It is easy. Have the seller sell the minerals rights to a trust or other legal entity they own. Then they no longer own them, so they don't have to list them "excluded". The fact that they are sold, will most likely come up in title, but by then home buyers don't care. Investors will check before hand with a title search if they even care.
0 votes Thank Flag Link Thu Feb 4, 2010
If my buyers don't get the Mineral Rights, as it will have to be stated in the contract, by all means, we'll definately expect to get a lower price for the house, of course this will depend from subdivision to subdivision. If there is no mention of mineral rights being retained in the contract, you need to know that the mineral rights will convey to the next buyers. Not disclosing certian things about the house, always comes to the surface on closing day, unfortunately. So always, always be up front with everything you know about the house, if you were the buyer, you'd want the seller to be up front too. Thanks for the question, Michaelle
0 votes Thank Flag Link Mon Oct 13, 2008
Potentially yes....for example while they own they home they could transfer the rights to an LLC....or they could have never have owned them in the first place. In Texas the mineral rights can be split from the surface rights. I think it is tough to tell what they are really worth. In city properties 2-3 years ago no one ever asked if they had mineral rights...and didn't really seem to care. Still this way somewhat in most of Dallas county. However in Tarrant County there is lots of interest. I've heard of one attorney saying recently that the royalties over the life of the lease might be worth the same as the bonus. The highest bonus in Tarrant that I've heard about is $50,000/acre...so in some cases it might be worth fighting for the minerals or royalties if you are looking for a larger property. If you're looking at a property that is 1/10 acre and the bonus has already been paid, then you're probably not talking a lot of money....$1000-$5000 over the next 20 years. Of course everything I've just said is about 1/2 speculation. Who knows where oil or gas prices will go in the next 20 years. Who knows what oil or gas is really there? Who knows how long it will last? Who knows what the future technology will be able to locate or extract? It may be tough for you to actually find out if they own them if they did not describe it in the listing. You would need to hire a landman to determine if they still own them. If they do and they want to keep them, then you are perhaps right in wanting to offer a lower price.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Sun Oct 12, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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