Buying or selling any property can be a complex matter. In the Marcellus region, homeowners have a more daunting task: how to evaluate a real estate transaction when oil and gas rights come into play. Below are four things to keep in mind when buying or selling in the Marcellus region.
Every bank has their own set of criteria for what they are willing to lend on. If you have a well on the property, or specific terms in your lease allowing a well pad, it can complicate the mortgage process. As a seller, your lease terms and surface activity could limit the number of buyers who can purchase your property.
As a buyer, the only way to ascertain whether or not the seller owns the gas rights they intend to convey along with the land is to have an oil and gas title search performed. This is separate from the title search customarily performed by a closing/title company prior to purchase, and regular title insurance will not cover oil and gas rights.
Gas leases contain many provisions for land use, such as granting the lessee permission to build a well pad on the property or construct pipeline that runs through the property. This can potentially affect where you can build a home, pasture animals, or raise crops.
The property value can vary greatly depending on whether the gas rights are leased, whether royalties are being paid, the location of the property, which companies are drilling in the area, whether the gas company has pipeline or well pads on the land, and the terms of the lease.
The real estate professionals at Southbound Enterprises regularly work with gas leases, pipeline agreements, and subsurface valuation. If you’re thinking of buying or selling in the region, let us help you answer these questions!
Hello and welcome to the Southbound Enterprises Blog! Find out more about us and what we do here.