What to Look for in Companies That Buy Mineral Rights (And 5 Red Flags to Avoid)
Updated: Nov 7, 2019
Just like in any industry, there are good apples and bad. Clear Fork Royalty has always strived to be one of the good guys, but that doesn’t mean that all companies that buy mineral rights are.
We want to make sure that our clients are making the best choice, whether that choice is to sell, keep, lease, or simply take some time to think all their options over.
Here are the top markers of a good (or bad) company that buys mineral rights. And, as always, if you have any additional questions, please, don’t hesitate to call our office. We’re always happy to provide a free, no-obligation offer for your mineral rights.
#1: Look for Transparency (Avoid Dishonest or Secretive Companies)
Clear Fork Royalty hasn’t just tried to be ethical and transparent with our clients, we always have been. But don’t just take our word for it, take it from the Fort Worth and Tarrant County Better Business Bureau that gave us the Torch Award for Marketplace Excellence, or the Fort Worth Chamber of Commerce which awarded us the Greater Tarrant Business Ethics Award.
Unlike some companies that buy mineral rights, we want to look out for our clients first, and make sure we are transparent, honest, and clear. Because, without strong communication, how can you expect to be happy with your mineral rights buyer?
#2: Look for Fair Prices (Avoid Under-Market Value Companies)
Clear Fork Royalty has heard of far too many stories where companies that buy mineral rights offer under-market values to clients who don’t have all the information. This is one of the reasons we strive to educate our clients before they sell, because we want them to know what a fair price is and know if they are getting one.
You should avoid companies who aren’t willing to explain their offer, or who try to sway you into believing that a price is good when you know it isn’t. Getting second quotes or offers is a great way to cover all of your bases.
#3: Look for ‘No Pressure’ (Avoid ‘Sell Fast’ Companies)
Have you ever felt pressured into a sale or purchase? We hate that feeling, which is why we never use pressure situations or sales tactics to get our clients to sell, instead, we provide them with all the information and encourage them to take time to decide.
Because we think it’s more important that you are truly ready to sell, and fully want to, than getting sales in unseemly ways. And that mentality and business practice is exactly why we are awarded and praised each year.
If you are ever speaking with a company that buys mineral rights and they seem to be pressuring you to take their offer without shopping around, or if they are trying to use sales tactics with you, we recommend stopping communication with them and finding a more reputable, transparent, and worthy gas and oil rights company to give your business instead.
Many companies will try to create a sense of urgency by saying you only have 24 hours to respond for the offer they’ve given, etc. Don’t fall for these scare tactics, and instead, take your time and find the best option for you.
#4: Look for Fair Option Agreements (Avoid Flipper Companies)
Thank you, Investopedia for the definition.
Some option agreements are skewed in favor of the buyer, and many companies that buy mineral rights use these advantages to flip your rights and sell them to a higher buyer, all while the paperwork is still being processed.
As an example, let’s say your option agreement has a fairly long timeframe, such as 90 days. This longer timeframe actually helps the buyer company, because they can be searching for a buyer at a higher price the whole time the paperwork is being processed and sell (flip) your rights, making a profit before you even get your money.
Clear Fork Royalty works hard to get you the best offer with the best option agreement, making sure you are satisfied.
#5: Look for Documentation (Avoid Corner-Cutting Companies)
In this scenario, documentation is not your enemy. In fact, any companies that buy mineral rights and require ‘little to no documentation’ are just as shady as that sentence makes them sound. Instead of trying to cut corners or going with a company willing to do the same, make sure you choose a reputable company.
This doesn’t mean they leave you floundering to find what documents they want and how to get them, but it does mean they should require documents (and then communicate clearly how you can get them, how you can send them, and how long the process on their end should take).
Any company who tries to skip legal steps or pull paperwork and agreements in their favor isn’t the type of mineral buying company you should work with.
Additionally, paperwork doesn’t mean the process has to be long, in fact, Clear Fork Royalty can often close the deal within just a few days!
Work with a Reputable, Transparent, & Ethical Company that Buys Mineral Rights & Rest Easy
Clear Fork Royalty has received awards, as well as praise from our past clients because we treat each seller like a friend, giving them the advice, information, and time they need to make a decision they will be happy with.
We never use sales tactics, pressure, or confusion to get what we want, instead, we strive to be honest, fair, and thorough, so you can rest easy knowing you made the right choice.
If you are considering selling your mineral rights, then contact Clear Fork Royalty for a free, no-obligation offer today. Or check out more of our articles on our blog for additional tips, tricks, and news!