Home Buying in 76012>Question Details

kevinpeterso…, Home Buyer in Arlington, TX

Question about buying a home in North Arlington -- the seller wants to keep the mineral rights.

Asked by kevinpeterson777, Arlington, TX Thu Nov 1, 2012

Two parts to my question:
1) How much should I ask for compensation for that clause? I have no idea what a typical homeowner in North Arlington gets per month for their share of the natural gas (.18 acre lot).
2) Should that be permanent? Or do they typically relinquish the mineral rights after a period of time?

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The United Home Team Vet Joseph Fernandez’s answer
"MEETING YOUR NEEDS AND EXCEEDING YOUR DREAMS!"

Excellent questions, the mineral right will automatically convey unless an agreement is signed by both parties. There is no relinguishment of these rights unelss agreed upon by both parties under any alottment of time. As the buyer you can show your intent to gain the mineral right by offering below asking price and attempt to pursued and or negotiate with the seller for those rights.
Keller Williams Realty
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Joseph Fernandez
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off: (817)635-1157
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1 vote Thank Flag Link Tue Dec 4, 2012
Most lenders won't allow home be sold UNLESS they are transferred difficult part that particular area of DFW

Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
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0 votes Thank Flag Link Thu Nov 1, 2012
Hi Kevin
First off, without being part of your entire negotiation process it is hard to say how to negotiate this one part of the contract. If you are working with a REALTOR, your REALTOR should help you with this as he or she knows where you are in the entire negotiation. My advice is to negotiate overall price, any closing costs you would like, and any personal items that you may want. Leave mineral rights as a "last stand" for your negotiation position.

This is one of the top questions that I am asked by both sellers and buyers here in DFW. "What about mineral rights?" My answer is most often, do not spend much time or energy negotiating mineral rights unless you own or are buying a large piece of land, such as acerage. Gas price are very low and there are so many wells currently in the Barnett Shale that most companies are not drilling any longer. It is not worth the cost to the gas companies to put new wells on land they already hold rights to. This means that the residuals are the compensation that you can hope to receive from the mineral rights. Residuals often are based on the amount of land you own, the price of the gas and the amount of gas removed. This tends to be a very small amount money unless you have a large parcel of land.

When a seller retains mineral rights they keep ownership so they will not come to you over time. So be aware of what you are giving up. You should receive what is known as "surface rights" to the property, this prevents someone from trying to drill in the back yard without your permission.
0 votes Thank Flag Link Thu Nov 1, 2012
Typically for a home in the city, Mineral Rights mean very little because it would be a major pain to clear enough land for a drilling rig and the economic requirements and everything would make this very difficult. If you are on the outskirts of Arlington, this might be a little more plausible.

Generally, if someone retains the mineral rights, then it is just like ownership: They are selling you the land and the home, but they keep what is underneath it. Unless they have a large portion of land in the area, I doubt they would argue over mineral rights. Just strike that clause out of your contract and return it to them for signing (ask your agent how to do this or ask him/her to do it for you).

If they outright refuse, then ask for a substantial deduction on the price of the home - see how much they truly value those mineral rights. When your agents does a CMA to determine the value of the home you are buying, have him/her check to see if those other homes gave up mineral rights. If they did not, then you have a case for getting a lower price.

If you need an agent to help you through this and do not already have one, give me a call.

Brian Rayl
B&B Realty Group - Keller Williams Elite
214-601-4192
Brian@Rayl-Estate.com
0 votes Thank Flag Link Thu Nov 1, 2012
I would think a lot that small would not have enough room for a house and drilling equipment. Is there already a well there? Are you financing the transaction? If so check with your lender first, good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
Web Reference: http://jamessimms.com/
0 votes Thank Flag Link Thu Nov 1, 2012
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