Get a BONUS, and 19% of the Profits -- Is it a Scam?

By
Real Estate Broker/Owner with House to Home, Inc. - Denver Real Estate - 720-231-6373 DRE# ER40011786

I have received a couple calls from past clients regarding communication received from "oil and gas companies".    Are they real?    Is it a scam?

 

They draw you in with --- a bonus by signing, and you will receive up to 19% of the profit from the production from drilling under your home.

 

That all sounds good --- but you also have to sign a W-9 with your social security number.    Are they working on gaining your personal information?    

 

I spoke with a real estate attorney, and said there are some companies doing "slant or directional drilling", and could be real, but she wanted to see the communication and company that is offering this "deal".

 

My client said the HOA has held meeting for the homeowners regarding this offering, so my clients think it is real.    My client is communicating with the attorney, as this is out of my hands.

 

Time will tell whether this is real, or just another scam!

Posted by

Joan Cox
Broker/Owner, REALTOR®
House to Home, Inc.

Serving the Denver Metro area including all suburbs


Helping Buyers and Sellers achieve their real estate dreams, one house at a time!

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Comments (22)

Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Good morning, Joan... I've always said that if your first instinct that something is possible a scam, it probably is.

Sep 29, 2022 06:49 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Joan Cox sound like a scam to me 

Sep 29, 2022 06:52 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Joan - due diligence is a part of everyday living.  Not to mention - unintended consequences.     

Sep 29, 2022 07:30 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Grant, got this client in touch with a local real estate attorney, and they have been communicating.

Sep 29, 2022 08:19 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Bill, it is always something, for sure.

Sep 29, 2022 08:19 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Nina Hollander, Broker after some emails between the client and the attorney, it DOES look like Lennar forgot to sever the mineral rights, and the owners do have the rights, so it MAY not be a scam.

Sep 29, 2022 08:20 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Hannah, I thought so too, but may not be as I hear more today.

Sep 29, 2022 08:20 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

So true Michael.

Sep 29, 2022 08:20 AM
Jeffrey DiMuria 321.223.6253 Waves Realty
Waves Realty - Melbourne, FL
Florida Space Coast Homes

Interesting. If they have mineral rights and are selling those rights, it might be real. I would be skeptical and have an attorney review anything before I signed. They also need to make sure no drilling can happen ON their property.

Sep 29, 2022 08:26 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Jeffrey DiMuria 321.223.6253 Waves Realty I am copied on the correspondence between my client and the attorney, and is looking like this is not a scam.    They cannot drill within 1,000 feet of the neighborhood, so they will be doing "slant or directional drilling".

Sep 29, 2022 08:28 AM
Jeffrey DiMuria 321.223.6253 Waves Realty

Having sold in Texas I can tell you this happens all the time. New developments there keep the mineral rights on much of the property they sell to buyers. Worth serious investigation. 

Sep 29, 2022 08:31 AM
Joan Cox

Jeffrey DiMuria 321.223.6253 Waves Realty that is exactly why I referred this client to an attorney, so he doesn't get scammed!    

Sep 29, 2022 12:05 PM
Nick Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtor, Philly Main Line

Wise for them to contact you and good to refer them to an attorney. So many scams out there that everything needs to be researched before making a decision.

Sep 29, 2022 08:43 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

DR Horton severed mineral rights in neighborhoods they built in NC years ago. When a homeowner found it resulted in an enormous law suit. Horton was required to issue new deeds, unsever mineral rights back to homeowners, etc. As a result, we have had an Oil Mineral & Gas Rights Disclosure that must be filled by sellers when a home is sold.

Sep 29, 2022 09:47 AM
Roy Kelley
Retired - Gaithersburg, MD

The best practice is to delete this stuff an move on.

Sep 29, 2022 10:57 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Nick, I so agree!

Sep 29, 2022 12:05 PM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Nina Hollander, Broker wonder why these things are SO different between states.   Here, almost all the mineral rights in the urban areas are owned by the railroad.   The mineral rights are always severed, but this one sounds like Lennar neglected to do so.

Sep 29, 2022 12:07 PM
Nina Hollander, Broker

Oh wow... just the opposite of what we have here.

Sep 29, 2022 12:12 PM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Roy, as I am watching the communication between these two today, it does sound like the homeowner DOES have mineral rights, and MAY have options.  We shall see.

Sep 29, 2022 12:07 PM
Paul S. Henderson, REALTOR®, CRS
Fathom Realty Washington LLC - Tacoma, WA
South Puget Sound Washington Agent/Broker!

Joan, When in doubt, run the other direction and save your hard earned money 🙂

Sep 29, 2022 10:07 PM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Paul, it actually is sounding real, Lennar DID not sever the mineral rights, and this homeowner does have the rights.

Sep 30, 2022 07:13 AM
Adam Feinberg
Elegran - Manhattan, NY
NYC Condo, Co-op, and Townhouse Advisor

I worked in commodities trading (Investment Banks, Hedge Funds, and I also worked for one of the largest commodities exchanges in the world). Even though my background was institutional and trading oriented- i.e. we worked with other investment banks, trading firms, governments, etc rather than working with the public- I have heard about this quite a bit (in order to understand the underlying market). While there are some scammers out there like any industry- it's not unusual for energy exploration company's to offer deal like this. 

An all too common issue here is that homeowners receive a huge benefit especially from any up front signing bonus- plus a cut of the profits...which sounds amazing. The concern is safety and process control. How do you know they aren't cutting corners in the process- destroying your clean water? For example- Fracking is a proven technology- and can be a great way to extract natural gas...but only if the drilling company follows best practices procedures. I would have the attorney's go over extraction methods, procedures and potential damages if it's not done correctly with a fine tooth comb. Hire the best energy drilling experts before signing any contracts. 

Oct 02, 2022 10:23 PM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Thank you Adam!

Oct 03, 2022 04:54 AM