Selling mineral rights can be a smart financial move, but it’s easy to make costly mistakes if you’re not careful. Many mineral owners, especially those new to the process, don’t realize how complex it can be to sell oil and gas royalties. From not fully understanding what they own to signing deals too quickly, we see the same slip-ups again and again.

This guide will walk you through the most common mistakes sellers make and how you can avoid them. With the right knowledge and the right buyer, you can make a safe, profitable sale without unnecessary stress.

One of the most common issues we see is sellers not fully understanding what they own. Mineral rights can be confusing, especially if you’ve inherited them.

Surface Rights vs. Mineral Rights

You may own just the surface, just the minerals, or both. Some people assume owning land means they also own what’s under it—but that’s not always true. It’s important to verify your ownership before you begin the selling process.

Partial Interests

It’s also possible to own only a portion of the mineral rights. You might co-own with family members or others. This can affect your ability to sell and your expected payout.

Many buyers know that mineral owners may not understand the value of what they have. Unfortunately, this leads to lowball offers—sometimes just pennies on the dollar.

How Low Offers Happen

Some buyers cast a wide net, sending out generic mailers offering quick cash. The offers seem simple, but they often come without a proper valuation.

What You Should Expect

A fair offer should be based on factors like production history, location, and current market conditions. At Fraction Royalty, we get you an offer within 24 hours, based on real data.

💡 Related: How Much Are My Mineral Rights Worth?

When the offer looks good and the paperwork is simple, it’s tempting to sign quickly. But rushing can lead to regret.

What to Watch Out For

• Unclear Terms: Some contracts hide clauses that reduce your payout.

• Long-Term Commitments: You might unknowingly agree to future restrictions or obligations.

Always take the time to read and understand the documents. Or better yet, work with a buyer who keeps things clear and simple from the start.

Many mineral rights sellers don’t think about the tax impact until it’s too late. A big payout can also mean a big tax bill.

Capital Gains Taxes

Selling mineral rights can trigger capital gains taxes, especially if the property has appreciated in value. You’ll want to plan ahead or speak with a tax advisor.

1031 Exchanges

In some cases, you may be able to defer taxes through a 1031 exchange, but this comes with strict rules and deadlines. Learn more from IRS guidance on 1031 exchanges

Mistakes happen, but they don’t have to. Here are a few practical tips to make sure your mineral rights sale goes smoothly.

1. Know What You Own

Before you even consider offers, make sure you understand your interest and what it’s worth.

2. Get Multiple Offers

Don’t accept the first offer that comes your way. Compare different mineral buyers. Better yet, choose one like Fraction Royalty that gives you a real offer in 24 hours and doesn’t pressure you to accept.

3. Ask Questions

No question is too small. Ask about the valuation, the process, and the terms. If a buyer can’t give you straight answers, that’s a red flag.

4. Consider the Tax Impact

Speak with a tax professional before finalizing the deal. A little planning can save you thousands.

💡 Also see: Should I Sell My Mineral Rights or Keep Them?

The best way to avoid mistakes is to work with someone who knows the business—and has your best interest in mind.

At Fraction Royalty, we specialize in small mineral deals that most buyers won’t even consider. We’ll get you an offer in 24 hours, we can close in 7 days, and there are no closing costs or obligations. We make it easy.

If you’re ready to sell, or just want to see what your mineral rights are worth, fill out our quick contact form below.