The only gas that I'm aware of under the ground in this area...is septic system gas...believe me no one wants the rights to that!

Great story Karen...you can really think on your feet!

I like the point you made to the seller.  Thank you for the post.

In my area, it is not uncommon to have the mineral rights separate from the other rights. Way back when, the railroad companies didn't sell the mineral rights when they sold off the land rights use. And water rights are controlled by the state. It is pretty unusual to have someone concerned about it though.

We don't have to deal with that up here.... the only times mineral rights are conveyed is the ocassional mining claim or very old original homestead.  The State of Alaska and/or the Federal Gov't retains the mineral rights to 90+/- of all land sold in Alaska.

Joan:  I am betting that the amount of gas to be derived from those tanks probably depends on what everyone had for dinner the previous night.  Ouch !  Joan... thanks for your kind words.

Melody:  You are quite welcome... and thank you so much for your kind comment.  Take care...

Well Karen I'm pretty impressed at how you handled her.........with kit gloves I might had....I also loved how you asked her if you could 'tell he a story'.....you're one helluva mean story telling machine!

Sarah:  This newly discovered natural gas field is called the Barnett Shale, and is thought to be one of the largest new finds in the entire country.  Out where there is open land... with is pretty much all around Fort Worth... newly-drilled gas wells can be seen just about everywhere.

As far as being concerned... the newspapers and some of the attorneys have been beating the bushes, so to speak, and sending all the individual home-owners letters concerning their mineral rights.  Now, I am not talking about mineral rights for vast areas of land, but one individual letter for each separately-constructed home on a small lot on a typical city block.  All of this seemed pretty goofy to me, too.

Jesse:  I am guessing you don't have to deal with that... because of the vast open areas up in Alaska.  I had never heard of this here either... until this recent Barnett Shale discovery.

Liz:  What a nice thing to say... and yes... I think it went well.  Liz, I think I get so much more accomplished with kid gloves and stories.  I tell these really goofy stories... the points of which are so very obvious, then ask my really dumb closing question... and the answer usually shows the seller (or buyer) understands my point and agrees with me.  That... of course... ends the debate quite nicely, and all remain friends.  Thank you so much for your kind words... I really appreciate them.  Take care...

Wow -- that was a smooth way to get your point across, diffuse the situation.... I like your style.

Retha:  Thank you so much for your kind words... I appreciate them.  I think so much more can be gained by telling stories that make my point, and then ending them with asking just the right questions.  Thanks again, Retha.  Take care...

That was really well done.  I sometimes still get really flustered when a buyer or seller asks for the truly absurd.  I tend to expect people to be at least somewhat sensible - however, I am learning that it doesn't always work that way. 

Kaen- I think you handled that very well and I don't think I would have done anything different.  Great Job!

So, it is a fact that the mineral rights under the homes there with that lot size have no value?  If you had the buyer for a similar property that was not going to convey the mineral rights  how would you explain that.  And if they were going to convey, would that be portrayed to the buyer as a positive thing. Why?

Laura:  Thanks so much for your kind words.  I think it all went very well, and the seller seems very satisfied.  Thanks for commenting.

Paul:  As I said in my post... it does not make sense for both the buyer and the seller to insist on keeping the mineral rights to a piece of property this small.  If all sellers convey the mineral rights along with the property... the problem is solved.  Of course, when buyers or sellers get absurd... the same kind of problems and confusion can arise as when those who write comments also get absurd.  You have a nice day now, Paul.

Ruthmarie:  Thank you so much for your kind comment on my closing technique with my seller.  It is very easy to get flustered under those conditions, but I have found that giving silly examples like I did above, and then asking simple questions as a follow-up... work very well with situations like this. 

After a while... situations like these actually become fun... because they become both so predictable, and so easy to handle.  Take care, Ruthmarie, and thanks again for your kind words.

Karen - Wow, this is the first time I've come across this.  Consider me parked while reading the feedback....

Hi Karen,

Great approach!  Well done.  We administer 1031 exchanges on mineral rights, water rights, oil & gas interests, etc. all the time, but it can get really sticky when its someone's personal residence.

Karen Anne, What is underground here can be just a pain -- foundation and septic geology.  If it doesn't work for either, you can't build or are stuck with what you've got.   I like that you used a simple, but fun, example to convey your point. 

It will be interesting to see how Fort Worth handles the use of this new field.

Karen, as a 'closing technique' I get it.  And if the mineral rights have no value it seems great. It isn't obvious to me from your post though that they have no value. I guess it is a legal issue but unless you know the correct answer with legal certainty it seems to me to be walking out on a limb. 

Congratulations on the gold star, Karen!  You handled the situation like a pro!

Jason:  I believe you are parked in a two-hour parking zone.  Ya know, the meter maids around here are pretty strict, so ya better be careful... :)

Bill:  Yes, things can get very sticky.  Often times, though, even sticky things can turn out well if handled properly.  Thanks for your kind comments...

Elaine:  I have usually found that simple, and usually fun, examples work best for me.  It must be a leftover skill from my nine years of teaching seventh grade... :)  Once I explain their options, most people feel what I have explained does make sense... and the conflict ends up resolved.  Thanks so much for your kind words.

Here most of the mineral rights on most properties were reserved by people a 100 years ago and to this day still are reserved to the benefit of their heirs successors and assigns, so it is for the most part a mute point.

Paul:  According to the seller's agreement, the royalties have a monthly value of about $40.  I usually don't go out on what might be a precarious limb unless I know it has been properly reinforced.

Margaret:  Thanks for pointing out the gold star.  It wasn't there when I made the last group of comments.  And thanks so much for your kind words.  I've been doing this for awhile... and although "practive doesn't make perfect"... practice usually makes "better."  Take care...

Thanks Karen.  That sits much better with me.  (I can be a little anal about details)

 So, I'm curious about whether the mortgage lien is also a lien on the mineral rights and would they be attached in a foreclosure. 

Alan:  Here we are talking about a 60 x 115 ft residential lot in a neighborhood of about 200 of them.  That is the typical lot size.  The neighborhood has been peppered with mailings from attorneys wanting to act as agents, and has caused much confusion.  So, with the newly-found Barnett Shale gas find here in Fort Worth, the situation has become an issue.  The rights, just like any other, can become the subject of negotiation, and can either be or not be conveyed.  But... if they are not conveyed, this can obviously lessen the value of the property... and bring up an additional item that is subject to negotiation.

Paul:  I am not an attorney, and I do not pretend to practice law... but usually a mortgage can only be a lien on the rights to the property that the owner has title to.  I would guess that if the mineral rights did not belong to the seller, they could not be subject to the lender's lien.  Does that make sense ?  And Alan... you, anal... oh my... I would never have guessed... LOL.  In a foreclosure... I don't know how rights that a seller does not have title to could possible be attached.  It would be like putting a lien on someone else's property.

Karen, I know they can't be attached if the holder of the mineral right is not the mortgagor.  But I'm also not sure if they can be attached if the holder is the mortgagor.  Are they conveyed in a separate document or in the deed conveying the ownership of the property.

Karen Anne, we have the same problem in White County ARkansas.  All of a sudden gas companies have come in, built wells, leased mineral rights and have upset our little apple carts.  People argue over mineral rights on 2 acres!  They want to keep them. 

There's a house for sale with 20 acres with a well already on the 20 acres and more could be built.  The seller, however, says he is keeping the mineral rights.  Why would anyone want to buy it without getting the mineral rights?  The cows on the 20 acres could be scooted off for more wells which you would not benefit from.!

It's a crazy world.  You handled it very well and I may need that speech soon.

Karen-Anne - Congrats on the gold star!  I think it is  a perfect example of how someone who is truly a professional can ease situations. Although this was about getting someone to be reasonable on a listing....the ability to get the seller to see the other side is a valuable tool during a heated negotiation.  Right now - every negotiation is a draining experience...our prices remain solid, but deals are few and far between and inventory is VERY LOW!!!  Just to get to the point of someone making an offer is like climbing a mountain.  To have $500k deals fall a part over $2000 - is just exhausting - and that's what is happening.  People dig their heels and wont' budge.  It's so irrational, you just want to scream. You would be a master at getting around things like this.

Barbara:  Obviously the situation is vastly different on a 20 acre piece of property.  I would guess that not conveying the mineral rights when selling that kind of property would have an incredibly negative effect on the overall value.  The property my homeowner is selling is about .12 acres... just a typical small lot in a typical three-year old neighborhood.  And... please help yourself to my closing techniques.  Be my guest !  And... thank you for your kind comments.  Take care...

Ruthmarie:  You are being very kind with your compliments.  Thank you.  The ability of being able to negotiate a compromise is a great thing to have.  Early in my career, I had a woman broker/owner who was absolutely brilliant.  Lillian Kahn taught me well... and to this day I thank her for it. 

It sounds like you are in an area where values are very stable, but still... thanks to the current political and economic situations... both buyers and sellers are very, very skittish.  As far as having a $500,000 sale fall apart over $2,000... that is one of the benefits of my being a RE/MAX agent.  If that were the case, and neither buyer nor seller would budge, I would very quickly eat that $2,000... and get the sale closed.  And... on commission decisions like that... the only approval I need... is my own.

Congrats on the feature, kiddo.  Nicely done.  It's not a problem up here in the mitten state.  There might be copper underground, that's about it.

Karen Anne:  I have never heard of such a thing, but will be having lunch with a title attorney next week.  She's one of the best legal minds I've yet to encounter.  Will throw this at her for fun. 

Paul:  I have checked with Alamo Title, who takes care of my closings, and here is the way it is done in Texas. 

If no prior agreement is made in the purchase agreement for the mineral rights to remain with the seller... those mineral rights convey normally as part of the rights contained in the typical warranty deed signed by the seller and conveying title to the property to the buyer.  No additional document is required.

If however, an agreement is made during sale negotiations that the mineral rights will remain with the seller after title transfer... that special provision is written into the warranty deed when title transfers to the buyer.  With that provision being inserted into the warranty deed... no addition document stating the failure of conveyance of the mineral rights from seller to buyer is required.

No remember everyone... many, many things vary from state to state.  Your particular state may work things differently... but the above information... which is true in Texas... came straight directly from Alamo Title... which is a "title company"... and handles closings here in Texas.  We do not have "round-table closings here... and in many instances, the buyer and seller never even meet.

Karen:  Thanks for your kind words... kiddo... LOL.  Natural gas is a whole lot easier to take out of the ground that I imagine copper is.  So Michigan is the mitten state, huh ?  Cute... I like it.  In Ohio, where I was born, we, as you know, are called Buckeyes.  I have always preferred, however, to be called a Buck-ette.  I like the sound of it much better.

Karen, I appreciate that you are so patient.  I find this an interesting issue.  I wonder how common it might be for the mineral rights to get 'lost'. It is something most people never think about.  If a deed is recorded with no mention of them is it assumed that they conveyed or did not convey.  And, if they didn't convey would a document evidencing them have to be recorded by the owner of them separately from the deed.  That is, how is a record that can span decades maintained.  If the owner of the land does  not own the mineral rights does the owner of the mineral right have to have a public record created.  I'm sure this would vary by state but probably not by a whole lot (maybe).

Well all's well that ends well. Talk about an objection handling technique. Kudos to you.

Great Job!  I would have loved to be a fly on the wall when the sellers eyes popped out!  Karen - you did well!

Karen Anne, I have to be honest almost all of the listings with a little bit of land around here don't have mineral rights anyway.  So how much land was the owner on; just curious?

Sometimes you just have to get a chuckle out of the reluctance of owners to give up thingss, the mineral rights or the dogwood tree that they planted when the child was two.

Fact is, the mineral rights are worthless unless the owner of the surface rights leases the rights for the extraction.  If the seller retained the mineral rights, they would have to have access for extraction.  How much would they be willing to pay the owner of the surface right for extraction??? 

You handled it well.  I still get a chuckle.

This always gets to me because it is so confusing. But what are you going to do if it hold up the sale.

I had a closing for a property located in Grant, AL(Marshall County) and the minerals rights were owned by the county. I thought that was different. I don't know about other places in Alabama.

Interesting blog Karen Anne.  This kind of situation could get more prevalent in the future with the price of fossil fuels going up.  

Robert:  Yes... all has ended well.  Now all I have to do is get it sold and closed.  Thanks for your kind words.

Nanette:  This woman's home was so spotless... there weren't any flies on the wall... or anywhere... LOL.  If was fun telling my silly story, and then watching the reactions.  I should have done a video, but then it would not have been all that spontaneous.  Thanks for your kind words.

Marchel:    From the size of most of the homes in Spring, TX that I have seen on your posts, you could probably put three of these homesites on one of yours.  I'm talking about the ones with the nice yards and the trees... lots of nice homes with privacy in Spring.  Here... I am talking about 50 ft wide by 110 ft deep.  We have areas with larger lots, but of course they are more expensive.

Lenn:  Yes... people seem to want to hold on to the silliest things, but then again, what may be important to us... like that tree you mentioned, may be only silly to someone else.

I know when my Dad died, and we had to sell his home in Cleveland, we (the kids) actually thought long and hard about taking about a dozen rose bushes and digging them up and taking them with us.  I remembered when my Mom planted them, and how much she doted on them.  We chose not to take them, and then the day after the new owners moved it, I drove by and saw that they had dug them all out... all of them... and had them all out at the curb for the trash collectors to take.

Of course, I put them all in my trunk, and took them home and re-planted them.  You just never know... one person's keepsakes are another person's trash.  Thanks for your kind words.  Sometimes when I am sitting there listening to an objection, and am deciding what story to tell to answer the objection... I almost break out laughing knowing in advance how they will probably react to my seventh-grade level story.  But... seventh-grade level or not... it usually works every time.  Take care...

Robert:  Yes, it can be confusing, but that's one of the benefits I have from being a Realtor for hundreds of years.  Hold up the sale ?  I don't think so.  If one is a skilled negotiator, there is always some sort of middle ground to work things out in.  Never, ever assume a brick wall cannot be dealt with.  Actually, that's when the fun begins.

Kim:  One of the things in real estate you can assume... is that you cannot assume anything.  Sometimes it is laws, sometimes it is only doing what is customary, but many, many things in real estate vary from state to state, and even between regions of each state.  Unless you know from the same situation having come up beforehand, it's always best to either check with your broker, title company, title attorney, mortgage lender, or whoever the correct source of expertise may be.  Nice to see you commenting, Kim.  I hope all is well with you.  Take care...

Paul:  I appreciate your curiousity, I really do.  But... you have worn me out.  I think I have exhausted my answers for you.  Remember... I cannot and will not play attorney.  Have a great evening.  Take care...

Ricki:  I am sure the price of fossil fuels rising only exacerbates the mineral rights issue, but to have it become a sticking point on a 50 x 110 neighborhood lot... well... the seller usually has other more important issues to contend with... so I just try and diffuse the issue.  It usually works.

I had a similar situation in January, only I was representing the buyer.  The Seller absolutely refused to give up the rights.  I just figured it was like what Dr. Phil said in trying to resolve issues between married couples:  Whoever the issue means the most to, the other person may want to concede.  It was very clear that the mineral rights meant more to the Seller than to the Buyer, so we ended up agreeing that if the Seller at some point wanted to dig for minerals, they would have to have the written approval of the Buyers first.  Everybody agreed and we closed!

Wow! She sure caved easily! Had I been her broker, we would have had a little chat about sticking to our guns! LOL!

Well deserved star Karen Anne... and well deserved listing too! 

Anne - Here in Central Florida we don't have any minerals underground, just termites... and no one wants them.  You did a great job, helping your seller see the light.

Karen Anne -- Do oil & gas attorneys provide assistance in these disputes, or is it always title companies?  There are some great law firms in DFW that specialize in oil & gas lease law and so forth.  Of course, sometimes an attorney can make things MORE complicated..

Karen Anne -- Great story telling!! I've never had to deal with mineral rights .... typically the railroad owns 'em all. At least in my experience so far. What are these worth? Are prices adjusted to allow for them?

Hi Karen Anne - The Barnett Shale sure has made it interesting here in Fort Worth hasn't it! Congratulations on your well deserved feature!

Sometimes its the oddest things that come up isn't it. All the best.

As a LAND MAN for Four Sevens Energy in Fort Worth (My other job) I can tell you that you should tell home buyers not to worry. Many of the people with these homes on small lots will only expect to get a 30-50$ a month check if they start producing natural gas. The only other bonus is that if the mineral rights lease expires, then the oil/gas company has to pay another bonues. Again, the money is minimal on small lots. I think you have a great script for the situation. People have been reserving oil/gas rights for since before the 1900's.

Emily:  From your comment, I am not sure if you are talking about a large peice of acreage, or just a small homesite.  Many times I find that the issue being discussed can be made better sense of if I take it in the direction of a story that I use as an example.  Now, it doesn't work like that all the time, but it is more like a parable in the bible that relates to a larger issue.  I am glad your situtation worked out for you.

Sorry I made a mistake Karen-Anne.  The deal didn't fall apart.  It ALMOST fell apart. But I had to argue with my brokerage for a compromise on commissions.  Since everything had stalemated, there was no place else to go. Had they not been willing to compromise I would have been OUT the door instantly.  In this market no one can afford to be bound hand and foot by someone guarding commission rates.  My split is low - so I couldn't afford to swallow the entire amount myself...no matter what.  I negotiated a compromise where both brokerages and the buyers and sellers had to swallow something!  What was exhausting was arguing on so many fronts.

Jennifer:  I am not quite sure that I would say this woman "caved."  She simply saw the wisdom of what I was saying... and once she understood that what I was saying made sense, she actually agreed with me that it would be better to not contest the mineral rights that might have brought her royalties of $40 a month... and have that upset the sale of her home, which of course would upset her plans of moving to Atlanta to be with her son.  It was not her caving, it was my superior negotiating skills, and my winning personality... LOL.  Jennifer... thanks for your kind words.  Take care...

Debbie:  I'm not sure who "Anne" is, but she isn't here to answer.  I'm Karen Anne, so my comment will have to do... LOL.

Termites, huh ?  Underground termites.  Is there some sort of animal that would see termites as the main course ?  That might work.  Anyway, Debbie... thanks for your kind words.  It just made sense for my seller not to jeopardize the sale of her home.

Eric:  All this concerns is a small 50 x 110 neighborhood lot with a little house on it.  The situation probably would never have come up until hordes of attorneys and agents peppered all the neighborhoods pitching signing leases with them for the rights to whatever natural gas would be found under their tenth-of-an-acre neighborhood lot.  I am guessing that the big winners, as is typically the case, would be the attorneys signing up these leases.

Gabrielle:  Thanks so much for your kind comment.  Telling stories is a great way to get one's point across.  You can take a more complicated issue and make it less so by creating a story that illustrates the common sense of what is best to do... than by ripping into the actual issue at hand... and then let the seller decide... which she did.  I just told my story, asked her what she thought, and then just quietly sat there... letting the silence build... until she answered.

Linda:  Yes, the Barnett Shale has brought up some issues we have never had to deal with before.  I've always been a "story teller"... I guess it came from nine years of teaching seventh grade.  It is a habit that has served me well.  Thanks so much for your kind comment.  Take care... hope you and hubby are doing well.

Bob and Carolin:  Odd things are often good things... and if they never came up, we'd never had the chance to solve them, and show how valuable our services are.  All the best to you, too.

Christopher:  Thanks... I think the script (story) was just what the seller needed to hear.  Her move out of state is extremely important to her, And holding it up for something minimal like that ended up not making sense to her... so she passed on it to assist in her move.

Ruthmarie:  When you are on a split, arguing with a broker can be horribly demoralizing.  That is why I would never work in an office where I had to get permission to adjust commissions to make something work.  Earlier in my career I was forced into dealing with that nonsense, and... believe me... never, ever again.  Take care... I am glad you made it work... great job !

I actually just lost a transaction like this one.... when the prelim came there was an issue with the mineral rights - 50% of them had been deeded to a past owner - and who knows what or where that owner is now... it caused the transaction to fail - we do have areas in Bend where there are no mineral rights - the city owns them though

Thesa:  Losing a transaction because of something like this can be very painful.  Well, it's always painful, So... will that property ever be able to sell ?  Or was it just the buyer or seller that was upset about it ?  Sorry it crashed, hon.  Take care...

Excellent, you handled is to perfection. Most of the time any mineral rights we have here are held by 3rd parties, which is one reason I always order pre-title committment to see if anything is funky. You did good. At least the seller had the authority to transfer them. 

You handled a potential problem with a lot of tact. congratulations! You are a PRO!