A 1961 mineral severance nearly ate a 24k assignment on 31 acres

The part I want is your buyer's side. 82k for 31 acres is 2,645 an acre, and he's got road, culverts, and a perc test on each lot before he sells anything. In my old world that road is not cheap on a wooded tract with any grade to it. Did you ever see his budget, or did you just watch him say yes in four days and take the number?

Your 24,000 sits inside the buyer's residual, and that's the assumption the whole result rests on. He pays 82,000, then carries survey, road, perc testing and marketing time before a single lot closes. If retail lot prices in that corridor move down 10 percent, his budget compresses by more than your fee, and the next 31 acre tract you bring him gets bid at 71 instead of 82. You already found that number, which is useful information about where his floor actually is.

On the mineral severance: a severed mineral estate doesn't get cured, it gets managed. What you obtained is a contractual surface accommodation from the current fractional owners. Whether that document binds their successors, whether it's recordable, and what the mineral owner's implied surface rights are without it all turn on state law and on the exact wording, so an attorney licensed in that state has to be the one reading it. Do not assume the waiver you got travels with the land.

The extension mechanics matter as much as the mineral work. 500 as nonrefundable consideration for 21 days only holds if the amendment is executed by everyone with an interest on title and references the original contract by date.

The part that was luck is finding five of six fractional holders in five weeks. A dissolved corporate mineral owner, or a family spread over four generations, runs months. Price that risk into your inspection period rather than into your fee, since the inspection period is the thing you control.

How did you get to 58 as an offer number? I can build a spreadsheet for a duplex all day and I freeze on raw acreage because I can't find two comparable sales that mean anything. Did you use closed sales, listings, or did you just work backwards from what you thought a splitter would pay?

Day 40, minerals still open, buyer says he's out. What actually happens to you? You said you had someone at 71. Does the seller take 58 minus your problem, or does the deal just die and you eat the 500?

I ask because the ceiling I keep hitting is exactly this. One buyer isn't a buyer list, it's a coincidence that worked.

So all in you were 2,100 of real money against a 24,000 fee. That's the cleanest cost stack I've seen posted here. What I want to know is the stuff that didn't hit your card. Deed room copies, mileage out to the tract, phone time on six mineral holders. Did you ever count hours?

Five weeks chasing a fractional mineral estate is scope creep with a different hat on. Same shape too. The task you scoped was "confirm title," and the task you performed was "assemble six signatures from strangers who owe you nothing." Nobody prices the second one when they write the offer.

Which list did this come off? You said absentee out of state owner. Was it a straight assessor pull filtered for owner mailing address in another state, or did you layer tax delinquency on top? And how many pieces did the batch that produced this one deal actually contain.

Honest question, is this repeatable or did you get one? You ran one campaign and hit. I'd want to see you run three before I believed the mail worked rather than the parcel being unusually good.

The five week signature chase is the only part I'd pay someone else to do. Did you handle it yourself the whole way, and would you do it again at that hour count, or would you have handed it to a title abstractor and taken the bill?

Let me test the buyer's side since @girder raised it. Six 5 acre lots off 31 acres, call it five sellable after road and setbacks. At 82,000 land plus say 60,000 of road and survey and testing, he's at 142,000 into five lots, 28,400 a lot before any carry or commission. If those lots retail at 45 to 55 in that corridor he's fine. At 38 he isn't.

So your 82 was underwritten off his retail lot price, whether either of you said so. Did you know his lot pricing before you named 82, or did he name it?

Sitting for my license exam and this thread is doing more for me than the course. One thing I don't understand: you marketed a contract on a parcel you didn't own to a buyer. Where's the line between that and needing a license? I've read that it depends on the state and on how the marketing is worded, which is not an answer I can act on.

@halyard, that line is real and it is state specific, and several states have moved on it in the last few years, so an attorney in the state where the dirt sits is the only reliable read.

@marlow, the document I want to see is the extension amendment. Did it re-open the inspection period or just push the closing date? Those are very different pieces of paper. If it only moved closing, you were sitting there for 21 days with your earnest money hard and a mineral holder who hadn't signed. Also, was the surface waiver recorded before your buyer funded, or delivered at closing as a side document that lives in a folder somewhere?

The interesting detail is that the mineral issue only surfaced because his lender asked. A cash buyer very likely closes on that tract without ever pulling the 1961 deed forward, and then finds out in year three when someone knocks on the door. Lender conditions do free diligence for everybody in the chain, and it cost you five weeks.

I'd have kept it. 58,000 for 31 acres on pavement in a county absorbing spillover is a hold, and you sold the appreciation to a man who's going to make 60k on it over 18 months.

I understand why you didn't. You wanted cash and you wanted out. Just naming the trade, because the fee looks big next to the 500 and small next to the tract.

Hours, please. I run a small crew and I price everything in labor. Five weeks of phone calls sounds like 40 hours to me and you'll tell me it was 12.

Back taxes. You mentioned two bills a year and a detached owner. Was he current, and did you confirm it at the treasurer rather than taking his word? I've watched a clean looking rural parcel come back with four years of delinquency plus a pending certificate holder, and that changes who you're actually negotiating with.

No tenants, no roof, no water heater at 11pm. I read this and felt something I'd call envy.

@cobalt's question is the one I want answered too, so here's my arithmetic on it. Say 90 hours across 68 days, sourcing through funding. 24,000 net of 2,100 is 21,900, so 243 an hour. Excellent. Say the mineral holders had taken 14 weeks instead of five and the buyer had walked at 71. Now it's 13,000 on 140 hours, 93 an hour, and you'd still call it a win in the post.

What's your number where you'd have walked away instead of extending?

Did any outside money touch this? Sounds like no, which is what I find interesting. 500 of earnest money and a mail budget got you to a 24k fee, and I keep being told the capital side is where the returns are.

Was there a survey of record, or is the 31 acres a deed call from a description written when the pine was standing? Every rural tract I've looked at is "31 acres more or less" and the more or less has been up to two acres in either direction. Who paid for the new survey, and did the acreage hold?

@fathom already asked the recording question and it's the one that matters most to me. A surface use waiver signed by five of six fractional owners, unrecorded, is a promise from five people. Whether it binds their heirs and whether the sixth holder's untouched fraction lets that party come across the surface anyway depends on the state's law on surface and mineral estates and on the waiver's own language. Somebody's real estate attorney needed to write that, not a template.

Did your buyer's lender accept five of six, or did the estate sign before funding?

The 500 hard for 21 days is the part that would have kept me up. Did you ever get to a point where you thought you were going to lose it?

How long between reading the seller's reply and deciding to send a contract? I take weeks on decisions and I'm trying to understand whether this strategy tolerates that or punishes it.

Two things. First, a severed mineral estate from the mid century is ordinary in a lot of regions, and you'll meet it constantly if you keep working rural acreage, so build the chain read into every deal instead of treating it as the story of this one. Second, and nobody has asked: was the 5 acre minimum lot size actually permitted there, or did your buyer assume it? Some counties in spillover corridors have raised minimum acreage or added road frontage requirements in the last few years specifically to slow splits, and it varies county to county even inside one state. If his split plan needed a variance, your 82 was resting on a hearing.

@orchard is right about the hold, by the way. You sold cheap to someone with a plan.

I have capital but no operation, so that's the lens here. One 24k fee out of one campaign doesn't tell me whether land assignment is a business or a lottery ticket you happened to buy. @verity asked it plainly and I'd want the same answer before I funded anyone doing this.

The piece of this I'd actually want to do is the five weeks of chain reading and cold calls to mineral holders, which everyone in this thread describes as the awful part. Is that a service somebody sells to land wholesalers, or does it just fall to whoever has the contract?