I have an offer for my mineral interests from Royalty Purchasing Partners of Lexington, KY.
How do I determine if they are authentic and not a scam? I called in reply to their offer and they stated they would send a deed and bank draft. I would then take it to my bank, get the deed notarized and send back to them. After they receive it, they would fund the bank draft.
Is this a normal practice? Or just a means to cheat people out of their lease?
My interest is in Tarrant County, Texas. The well is the White South 1H (Chesapeake).
I tried doing business that way with a major O&G producer and it didn't work out ok. I would not do business with anyone in the future on a like basis. Ask yourself what happens if they don't fund the draft? Best case is you raise hell for some months and they finally pay. Second best is you have to sue them and they eventually pay after you have run up quite a large legal bill out of pocket.
Better would be to escrow your executed deed with your bank or a lawyer so that when the draft is funded and you have cash, the deed is sent to the purchaser.
Better still would be a live check, so your bank could immediately go after the funds, not to mention that there are other legal remedies with a bounced check.
Do not accept a partial payment that could bind you and make you go through court to get the remainder of what is owed to you.
Personally if I were selling I would try to find an online brokerage where the bidders were vetted, you might even make more from the sale.
Mr. Kennedy's comments are good advice. Use common sense throughout any transaction.
We usually buy with an Order of Payment. We get a signed deed that we hold and the mineral owner gets an Order of Payment. Until recently, all of our Orders were 30 business days. We don't actually verify title until we have an agreement. We don't record the deed until we have verified title and paid the mineral owner. Many times we have to get a new deed signed after title because of discrepancies we find in the description or how title is actually held.
There are instances where we will exchange a check for the deed.