Tips for Selling Royalties

Tips for Selling Royalties

You’ve decided to sell oil royalties or sell gas royalties, but what important things do you need to know before you sell?   Don’t miss these tips for selling royalties that will help you maximize the value of selling your royalties.

Important Tips for Selling Royalties

1. Don’t Rush! – The most common mistake people make when selling royalties is rushing to get them sold.  After receiving an offer, they take the first offers and hope they got a good deal.  Selling royalties is not something you should do after receiving a single offer!

2. Bad Buyers – Unfortunately, there are a lot of buyers out there that will not pay you fair market value when you sell royalties.  Here are some of the common red flags:

  • Offers received in the mail  (typically low ball offers)
  • Fast Deadlines – 24 hours to decide? Run away! They are trying to force you into a bad decision
  • Slow Closing – If they want more than 30 days to close, run!

3. Understand Value:  When you sell royalties, you need to understand the value of your royalties.  Your royalties should net you between 4 years to 6 years of production in most cases.

4. Where to Sell:  Where you sell your royalties is possibly the most important tip we can give you!  Don’t waste time visiting websites that offer to buy your royalties.  List them online at US Mineral Exchange and let all the buyers come to you.

5. Check Stubs:  If you want to sell royalties, the first thing a buyer is going to want to see are the most recent checks stubs.  Hold onto your check stubs so you provide these to a prospective royalties buyer.   The more information you provide, the more likely you are to get fair market value.  Your previous year’s 1099 is also a helpful document to keep!

6. Taxes:  Don’t forget that selling your royalties can have tax consequences.  Consider all of your available options by speaking to your accountant to ensure you don’t pay too much in taxes.

7. Timing:  When you decide to sell royalties can make a big difference. The price of oil and gas can have a significant impact on how much you are receiving.  If oil and gas prices are high, you can expect to sell royalties for a higher price!  If prices are low, it will negatively affect the value!   Keep this in mind when you decide to sell.

Questions about Selling Royalties?

Still have questions about selling royalties after reading our tips for selling royalties?  We’re happy to help! Simply fill out the form below and we’ll be in touch to help answer your questions:

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