I decided to sell my mineral rights in land in Reeves county. I went to a landman to see if he could beat the offer that had been made to me. He did. He’s going to charge me 5%. Does that sound right?
It’s right only if it was agreed to.
I take it then that it is not right if I haven’t agreed to it?
I haven’t signed any contract yet. Your cryptic response makes me think I’m being cheated. Can you tell me what is a fair percentage? I would appreciate an honest response.
A fair percentage depends on a lot of factors and is best negotiated up front. Typically there might be a lower percentage for a bigger deal and a bigger percentage for a smaller deal. The percentage could be based on the overall sales price or just the improvement that the Landman was able to negotiate for you.
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I suggest attorney Wade Caldwell. His office has done well for us.
I would reconsider. You can get those better offers without having to pay anyone, heck you might be able to get more. Also, was he able to get you enough more to justify the 5% anyway?
He lowered his percentage to 3%. The deal he found was $100K better. I’m satisfied. Thanks.
Congratulations. That is what free enterprise is all about & everyone likes a satisfied seller.
Charged you 5/3% for what? Did he lease the minerals or find you a better offer?
He found me a better offer.
As a mineral broker myself I can tell you that the fee is always negotiable but always settled up front. As far as doing this yourself, that can get pretty hairy. There are so many factors involved in minerals that arises during the due diligence portion of the Purchase Sales Agreement that could affect the final price you will receive for your minerals. At that point you may be locked in and be forced to sell at a lower price. That is just one aspect…there are many, many more. As a rule a broker will get more for you and help avoid the dangers.
I got $13k per acre.
If you are actually selling your mineral rights you should get the cash and retain a small override percentage for yourself!!!
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Minerals don’t get orri’s.
ORRI is not mineral ownership. It is carved out if an oil, gas and mineral lease and is a burden to the Lessee.
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TankMac, Remember the reason so many suggested you seek an attorney on any sales of minerals. The Big Print Giveth, and the Small Print takes all the minerals you have, not just what you want to sell. Please be smart and consult and attorney with the specialty of Oil and Gas. Chances are he can get you a better deal to. By the way, You do know that Reeves County is one of the Strongest Oil Producing Counties, and when you sell your giving away your rights to future moneys that you could leave to your children. My Grandfather’s saying was You can sell the Land, but you can never sell the Minerals. They pay dividends that keep paying and paying for ever and ever.
5% does not sound unreasonable, but for that fee the landman should be able to tell you a lot about the area where your minerals are located … what wells have been drilled on them, what wells are permitted, who is drilling, what the average well looks like, and what the mineral buyers have been paying in the area. If all he does is call other mineral buyers then maybe he would be worth 5% of anything over what you are currently offered … if your minerals are like mine, you get offer letters every month by 5 or 6 companies. It is easy to call yourself, but what is not easy is to figure out what is going on, what activity in the area and what is a fair price
I’ve been a landman for 15 years. If you think 5% will for for a landman who will get the job done, then great. You could also negotiate a flat fee.
I wouldn’t use an attorney they charge by the hour and charge way more than the work is worth. Good luck.
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He is not buying your minerals, he is flipping them to a potential buyer for a fee. I would ask for a copy of the mineral deed he intends to use with the Grantor and Grantee filled out in paragraph 1. I would negotiate the fee down to 3%. If he declines, then move on. There are plenty of buyers out there that will not charge a fee
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