selling without mineral rights

We own 5 acres in Columbiana county. We are thinking of relocating to another state for my husband’s job, how hard do you think it will be to sell our home without the mineral rights? We haven’t signed a lease yet but hopefully will here soon. Also, does selling the property without mineral rights make the property worth less? Thanks for any help!

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Permalink Reply by JR on April 27, 2012 at 10:41am

 I'm told by professionals it significantly lowers your value to sell without mineral rights.  A realtor told me he's having a really hard selling a beautiful $500k house bc of this reason.  

Permalink Reply by Allison on April 27, 2012 at 10:44am

I have been told the same thing, but i've also been advised to never sell without retaining the mineral rights. Does anyone know how significant it drops the value?

Permalink Reply by ray schmidt on April 27, 2012 at 10:52am

dont know how it works but i think to be fair you should subtract your sign on bonus from what you would normally be asking for property.imho.

Permalink Reply by Jimmy Wilson on April 27, 2012 at 11:10am

5 acres... sell the house with the rights, tack on a few extra bucks and call it good .... 5 acres will not mean didilly squat in royalties

Permalink Reply by Allison on April 27, 2012 at 11:31am

I have a lawyer and he has told me the signing bonus is nothing compared to the royalty. i just hear so many things from so many different people, its hard to know what to believe

Permalink Reply by Kathleen on April 27, 2012 at 11:54am
That's if you get in a drilling unit. If I was selling and unleased I would pay so much attention to the landowner rights in that lease when one is presented if you are even considering keeping the rights. If the property is great, the schools are fantastic, etc a bad lease a new owner has to live with could kill any sale with or without rights. Your to small for a pad on your land but a giant 36" pipe flowing with a zillion gallons of gas could scare some people off as an example. Many leases only allow for the liquids that are from the unit to,pass in pipes on their property. It's called no foreign pipelines.
I've been thinking of buying lately and I'm torn if I buy a place with 5 acres or under would I without the rights. I know all larger parcels will most likely sever (sp) the rights from the surface but I don't know what to think of your size and smaller.
If I was you I would get the bonus for sure, and talk to a realtor since maybe the house price would go higher with a good lease going to the next owner and they have to see if one day one acre or all get into a unit.
Good luck. By the way if I sell my 19 acres with two houses the rights will stay with me no question.
Permalink Reply by Billy Park Whyde on April 27, 2012 at 2:26pm

I tend to agree with you in this Jimmy due to the acreage involved. 

Permalink Reply by Jack Straw on April 27, 2012 at 3:19pm

I do not know your area.

I do not know whether it is considered a dry gas area, a wet gas area or an oil area.

If dry gas, the O & G rights would not likely be of great value.

If wet gas, the O & G rights could be of more substantial value.

If oil, the O & G rights could be of substantial value; even on only 5 acres.

One possible solution to your dilema; retain O &G rights - but write into the deed that no surface access or tresspass of any type is allowed for extraction of Oil & Gas. In that manner future owners are protected from direct impact and you (and your heirs) can still benefit from what might lie many thousands of feet below the surface.

 

All IMHO,

               JS

Permalink Reply by Allison on April 28, 2012 at 6:41am

We are close to the sanor well in knox township. What kind of things make "a good lease" I have no experience with any of this.

Permalink Reply by Lance Nimmo on May 1, 2012 at 2:59am

The deed with that language won't mean squat if there is a lease signed beforehand. The lease will have domain over what is in the deed.

Permalink Reply by Jack Straw on May 1, 2012 at 4:13am

Correct, the verbiage in the deed would need to pre-date the O & G Lease.

Since the individual who brought up the concern has not yet leased, there is clearly the ability to a priori alter the deed.

Another possibility is to write into the lease that no surface access or trespass of any type is allowed for extraction of Oil & Gas.

With a house on 5 acres, there would be little desire (or ability) for an O & G Company to site a (large) horizontal well pad on those scant 5 residential acres. With a house on 5 acres, there would be likely be little desire (or ability) for an O & G Company to site a pipeline on those scant 5 residential acres.

An O & G Company would probably have no problem including such a minor restriction in a desired lease.

When the property is sold, that same restrictive verbiage as in the lease could be inserted in the deed.

 

 JS

Permalink Reply by Frank Nesmith on April 30, 2012 at 9:52am

I'd let the mineral rights go with the land if you really want to sell. Many banks aren't lending on homes with leases on, so that could make it really hard for you to find a lender. Not a problem for us that are staying, but if you are leaving, leave them.

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