Fair market value for selling oil and gas royalties
Do you want to receive fair market value for selling oil and gas royalties? Everyone does! The problem is that figuring out the fair market value for selling oil and gas royalties is not as easy as it seems. You could spend hours trying to find the value of oil and gas royalties and turn up empty handed. The reason is that royalty buyers don’t want to publish a fair market value for selling oil and gas royalties. By doing so, they would be setting an expectation for how much you could expect to receive. Most royalty buyers want to purchase oil royalties below market value.
If you are considering selling oil and gas royalties, carefully consider the information in this post. We’ll explain everything you need to know about receiving fair market value for selling oil and gas royalties.
What is Fair Market Value
Whether you’re talking about mineral rights, a stock, or a house, fair market value is important to know. In simple terms, fair market value is the highest amount a buyer is willing and able to pay today.
It’s important to point out that there is a key difference between selling a stock or home and selling mineral rights. The housing market and stock market have thousand of transactions a day. This allows you to quickly estimate the value of your property based on what other properties are selling for. If you own stock in Apple (AAPL) there are thousands of transaction taking place every minute so you know how much your stock is worth. If you own a home you can check houses sold in your neighborhood and compare square footage/condition to estimate the value of your home.
Unfortunately when it comes to mineral rights determining the fair market value for selling oil and gas royalties is not as easy. The reason is that all sales are done privately so there is no public information that will tell you the fair market value for selling oil and gas royalties. In addition, the number of transactions taking place is just a handful each day spread out across the entire country. With few transactions and no information available determining the fair market value for selling oil and gas royalties is extremely difficult.
Estimate fair market value for selling oil and gas royalties
While no one can give you an exact answer, we can tell you that in our experience the fair market value for selling oil and gas royalties tends to fall between 4 years to 6 years times the average amount you receive each month. If you want to get a rough estimate of the value of oil and gas royalties, fill in the average amount you receive each month in the first box below. This will at least give you an estimated value of what you might expect to get. Keep in mind that there are a number of factors that could cause the value of your royalties to be significantly higher.
How to determine fair market value for selling oil and gas royalties
Since there’s no public information available and little data about sale prices, how can we possibly determine fair market value for selling oil and gas royalties? The truth is that there is only one way to determine the fair market value for selling oil and gas royalties. If you want to maximize fair market value you need to put your property in front of a large number of buyers. Doing so will allow these buyers to see your property is available and submit a bid. As each bid comes in, it will help show you what the true market value for selling oil and gas royalties is. Let’s look at a quick example. Let’s say you are currently receiving $250/month in royalties income (on average). You place your property on the market and you get the following bids back:
As you can see, the bids were all over the place. This is not uncommon at all when you sell royalties in Texas. However, by getting multiple bids you can quickly see that on average people are valuing your property between $11K-$16K. There was one low ball offer of $9,750 and one offer at $18,275 that was a good amount higher. Clearly accepting the highest offer of $18,275 is in your best interests as that amount is truly the maximum fair market value you could receive.
How to Sell Oil and Gas Royalties
If you want to get maximum fair market value for selling oil and gas royalties, we can help. At Sell Texas Royalties we specialize in helping royalty owners. We work with an extensive network of royalty buyers from all over the United States. When provide us with information about your property we will get it on front of all these buyers. The buyers will then compete to pay you the highest possible price for your property. Many royalty owner trust Sell Texas Royalties with the sale of their royalties because we consistently help owners get the highest price.
The best part about working with Sell Texas Royalties is that there is no cost to use our service. Once we help you locate a buyer you don’t owe us anything. Buyers pay us a small fee for helping them locate a property. In addition, there is never any obligation to accept an offer. You can list your property and see what offers come in and only accept if you find one that meets your needs.
Questions about fair market value for selling oil and gas royalties?
Do you have questions about fair market value for selling oil and gas royalties? Perhaps you’ve received an offer and you aren’t sure if it’s a fair one? If so, we can help. Simply fill out the form below and we’ll be happy to discuss your property with you. There is zero obligation when you fill out the form so don’t hesitate to let us know what questions you have.