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  • Writer's pictureSteven Hatcher

Read This Before Selling Mineral Rights! | Types of Mineral Buyers and Who To Avoid!


Series 2: Types of Mineral Buyers and Who To Avoid

 

Howdy folks! Welcome back to the Minerals Guy Blog. For those of you new to the blog, Minerals Guy provides tailored content and resources to owners of oil and gas minerals and royalties with the goal of educating and empowering them to understand more about minerals as an asset class and the potential value of their mineral rights. If you haven't already, check out our social links below and give us a follow!

 

Introduction


Have you ever received a flyer, cold call, or potentially even a text message or voicemail that just appeared on your phone, from someone offering to buy your mineral rights?


Mineral buyers are everywhere and not all of them have your best interest at heart!


In Part One of this Series, we talked about the History of Mineral Buying and the Knowledge Arbitrage (you can find that post here).


In Part Two of this Series, we talked about the Shale Revolution and emergence of the market for oil and gas mineral rights and royalties (you can find that post here).


Today, in Part Three of this Series, we are discussing the types of mineral buyers, how to evaluate them, and red flags that can help you identify folks you should avoid.


Let's dive in...

 

We also have a YouTube video on this topic. If you don't feel like reading, you can check out the video here:


 

Part 1: Who Should You Work With?


If you own mineral rights, chances are that you've received contact from someone in the past offering to buy them. The market for oil and gas minerals has exploded over the past decade.


While there are plenty of quality mineral buyers out there, there are just as many Fly-By-Night, faceless groups that will try to take advantage of you.


So, how do you decide who you should work with? How do you avoid the Fly-By-Night groups that will try to take advantage of you? How do you maximize the value of your minerals in a sale? We are going to answer these questions today, so keep reading!


The first thing you should do is to make sure that you're working with a Professional Mineral Buyer. But, how do you distinguish a Professional Mineral Buyer from a Fly-By-Night? Here are some tips for evaluating individuals and companies.


Evaluating Individuals


Joe mineral buyer gives you a call. What do you do? The first thing you want to do is get Joe's first name last name and the city he’s located in or calling from. This may seem very simple, very rudimentary, but with that little bit of information you can do your own due diligence through a simple Google search to confirm that Joe is who he says he is. Does Joe have a professional LinkedIn profile? Does it confirm that Joe, in fact, works for the company he alleges to represent? If Joe is a legit professional mineral buyer, there is a good chance that he is going to have some form of online presence.


Equally as important as any information that you're going to find on the internet is your gut level feeling when you're talking to Joe on the phone. How does Joe make you feel? Is he trying to be helpful, or he is like a used car salesman?


We are big believers in human intuition and trusting your gut when it comes to judging character of folks that you're dealing with.


Evaluating Companies


After you've satisfied yourself that the individual that you're dealing with is legit, then we move up to the company level. What is the name of the company that Joe works for? The first thing that you do when evaluating a company is to find their website through a simple Google search. Looking at the website can give you a really good feel for the level of professionalism for who it is that you're dealing with.


Does the website tell you where the company is focused? Does it tell you how the company is funded? Does it tell you who the owners and officers of the company are? Many companies will also list employees.


Are there pictures and profiles of at least management, if not employees? If so, this is a good indicator that you're dealing with a professional mineral buying shop and not a Fly-By-Night.


After you finish your review of the company's website go back to your Google search results and look through the rest of the results. Is there anything in the results that gives you pause? Is there a negative comment web forum that was written two years ago? Is there anything that gives you confidence that you're dealing with pro’s? Is there an article that was written about the company or a press release from the company’s last fundraise?

 

We are always here if you need us...


Our heartbeat is to serve mineral owners and we driven by core values of transparency and fairness.  Everyday, we help mineral owners to retire, send kids to college, start a business, get out of debt, take risk off the table, and pursue the things in life that mean the most to them!


If we can be of service to you or someone you know, click the link below to schedule a consultation.

 

Part 2: Red Flags!


So, now that we've talked about due diligence on individuals and companies, let's talk about red flags. Here are a few thoughts to consider:


1. Avoid Unscrupulous Buyers. Is the person that you're dealing with in any way being elusive or evasive about who they are or who it is they work? It’s unfortunate, but mineral buying has its share of unsavory characters, and you want to avoid them! So, trust your gut!


2. No Online Presence. You can't find any information online about the individual that you're dealing with or the company that they claim to represent. In this day and age, it's almost expected that professionals, especially folks in a sales type role, would have some form of online presence.


3. No Personal Information on Website. The company’s website is devoid of personal information, contact information and there's no physical address listed for the business. Most, if not all, legitimate mineral buying companies are going to list owners, managers and, potentially, employees, and their websites are going to contain either pictures or written profiles of those folks. Companies do this to show you who they are and to provide legitimacy. The absence of any sort of personal information on a website is a big red flag.


4. High Pressure Sales Tactics. We're all familiar with it and no one likes it! The market is big enough that you don't have to put up with it. So, if you're uncomfortable with the pace at which the potential buyer is pushing you, do not feel any sort of obligation to transact with that buyer!


5. Unsolicited Checks, Deeds and Legal Documents. If you ever receive an unsolicited piece of mail that looks a check, a deed or a legal document that uses words like “oil and gas,” “minerals,” or “royalties,” do not sign it! Throw it in the trash!


It's actually illegal in several states for mineral buyers to send unsolicited mail that looks like a mineral deed.


Unless you are expecting to receive a legal document from a company that you are working with, do not sign anything that looks like a legal agreement or a mineral!

 

Wrap Up


We’ve covered a lot of ground today! Mineral buyers are everywhere and the market for oil and gas minerals has grown substantially over the past decade with the emergence of the Shale Revolution. Remember that the market is large! There are plenty of legitimate professional mineral buying companies that you can work with. There's absolutely no reason for you to work with a Fly-By-Night company!


When you're talking to folks, think about what we've discussed today. Look for those red flags and trust your gut! If you need help with your specific situation, feel free to reach out to us!


Until next time…

Steven Hatcher



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