I own some mineral rights in Nacogdoches County and am considering an offer to sell them. The offer seems in the ballpark, if a little low. I know the pros and cons and am aware of the long-term potential these rights have but have personal reasons to sell.
My concern is that the prospective buyer is unknown to me and has a near zero visibility on the internet. What I have found seems to verify what I have been told about their viability. And the papers sent to me seem to be in order according to my attorney. My big concern is that they are proposing payment to me by company check.
Is it customary that a high 5-figure amount would be paid in that manner? I definitely prefer it to Bank draft. And Cashier's Checks are just as vulnerable as standard checks in this day and age. Would I be out of line to request Wire Transfer? Or Cash?
I'm worried about signing over my rights without some guarantee of funding but don't want to be unreasonable either. Advice and similar experiences are highly appreciated.
Dear Mr. Scogin,
First, since you have an attorney, you might want to follow his advice.
Otherwise, if it were me, I would accept a company check. If it bounces, then the mineral deed is not valid and the payor is guilty of theft by check.
Would it be unreasonable to request a wire transfer? I think not, but in this case, who will be the escrow agent to handle the transfer? The purchaser might say that if you send them the deed, they will transfer the funds by wire and you are in the same situation.
As to visibility on the internet, that does not prove much. I was challenged recently because the lady could not confirm my phone numbers. My numbers happen to be a Vonage number, which is non-published, and a cell phone, likewise non-published.
In this business, high 5 figure numbers are just a routine number. Maybe I am too trusting, but I would take the check to the bank and deal with it in business manner if it does not clear. Otherwise, I would let my attorney handle the details like the money and transfer of title.
Thank you Mr. Cotten.
The attorney I referred to is a probate attorney of my sister’s (she co-owns the rights) who looked over the sale paperwork for any glaring errors. The attorney has no real experience in oil and gas matters. My sister works for a bank and runs across scams regularly. She is therefore highly suspicious and wants CASH or wire transfer. However, your input makes good sense to me and I am inclined to agree about the company check being simpler and more straightforward.
Thanks again. Your comments are highly appreciated.
Rick Scogin
Buddy Cotten said:
Dear Mr. Scogin,
First, since you have an attorney, you might want to follow his advice.
Otherwise, if it were me, I would accept a company check. If it bounces, then the mineral deed is not valid and the payor is guilty of theft by check.
Would it be unreasonable to request a wire transfer? I think not, but in this case, who will be the escrow agent to handle the transfer? The purchaser might say that if you send them the deed, they will transfer the funds by wire and you are in the same situation.
As to visibility on the internet, that does not prove much. I was challenged recently because the lady could not confirm my phone numbers. My numbers happen to be a Vonage number, which is non-published, and a cell phone, likewise non-published.
In this business, high 5 figure numbers are just a routine number. Maybe I am too trusting, but I would take the check to the bank and deal with it in business manner if it does not clear. Otherwise, I would let my attorney handle the details like the money and transfer of title.
Best,
Buddy Cotten
www.cottenoilproperties.com
Co-Director, NARO-TX