Putting your home on the market can be a complicated ordeal. Not only are you trying to navigate uprooting your entire life and transporting it to another location, but you’re also trying to coordinate the logistics of actually getting your house show-ready and bringing in prospective buyers.
When you list your house on the market, one question you’ll have to consider is whether or not you want to retain the mineral rights after you sell the house. Depending on the size of the royalty check you receive every month, this could be a potentially expensive decision to make.
What are Mineral Rights?
When you buy a home, you also buy the land that it comes in, which includes whatever minerals are found underneath, like oil, gas, stones, etc. Legally, that is your right to own, sell, or donate as you see fit, but since most homeowners don’t have commercial drilling equipment or the contacts to sell the minerals, they choose to license those rights to companies that do. In exchange, they receive a royalty check that can be anywhere from a few dollars a month, to several thousand. It’s important to shop around for multiple offers before making your decision to get the best deal.
Do I Have To Sell Them With the House?
Absolutely not. Many people who sell their property choose to put an exemption clause in the contract to keep the mineral rights while still selling the land and any structures that sit on it. This allows them to keep the somewhat sizeable royalties they receive from other companies.
However, it should be noted that just as home sellers are looking to retain mineral rights, so are many homebuyers looking to obtain them, and may not sign a contract that excludes the mineral rights from the sale. If you’re still set on selling the home, it may mean giving up the rights or pricing the house lower to accommodate.
What are the Best Ways to Sell the Land and Keep the Rights?
There are several options to keep your mineral rights while still selling the land, ranging anywhere from the simple to the extremely complex.
- Put It in the Contract – This is the most straightforward route and the one you should try first. Simply put, if the buyer is ok with not obtaining mineral rights, you have every right to keep them for yourself, but it must be in the contract for it to be legal.
- Sell Surface Rights – Instead of selling what’s under the ground, negotiate to only sell what’s on top, such as water, trees, rocks, etc. These aren’t necessarily as valuable as mineral rights, but can still carry significant value. This is called severing the mineral estate from the surface estate.
- Give the Rights to a Third Party – This one is slightly-underhanded, but some buyers choose to give the rights to a relative to look the buyer in the eye and say, “I don’t own them anymore.” By doing this, they remove the mineral rights as a bargaining chip completely, while still maintaining possession.
