Many people don’t really give a thought if there is anything valuable underneath the surface of a property. Most of us would only look at the exterior part of the property and the land, but not really what’s beneath it. Well, you just might have to, especially when you’re buying a property in a place where minerals and resources are abundant. In this case you have to buy the land with the mineral rights.

Check first whether the property you’re buying really does have mineral deposits underneath. You can ask for help from a local geology surveyor for this. You can ask around real estate agents, developers, or lawyers for any recommended surveyor.

Local and state laws regarding mineral rights are usually the same in many states. But it won’t hurt to check just to make sure. The state you’re in may have different definitions and elements for mineral rights purchase and extraction. Ask help from the local land commission or a real estate lawyer you know in the area.

When creating the contract for the purchase of the land and the mineral rights, it is important to write down the minerals included in the purchase. Include the sub-surface extractions and clear up any issues regarding the price of the mineral rights.

Now the seller might want to keep some of the minerals of the property. In order to obtain all the mineral rights, you’ll have to negotiate the price of the mineral upward. You should define the minerals and rights included in the transaction clearly to avoid future disputes.

One important thing to remember when doing a deal with a property with mineral rights is to always seek counsel from a real estate lawyer. Have your contract looked over and checked before finally agreeing to the deal. Buying land with mineral rights, after all, have great advantages for you as the buyer and you’ll need to make sure that the mineral rights are yours.

In real estate, contracts are a must. But what can sometimes be surprising is that despite the fact that it is a common requirement for deals and investments, only a little of it is understood. Nevertheless, it doesn’t matter if you’re beginner or an expert in real estate investing. You have to be equipped with contracts when working on your deals.

As real estate contracts are based on common law principles, it is naturally important that real estate investors understand the general flow of contract law: offer, counteroffer, and then acceptance. Although there are some differences in the contract law of each state, generally all contracts come down to a center point: mutual agreement between the parties.

Basically, the contract is initially drafted and serves as the “offer.” If the seller wants to add to the contract (another condition or a clause), then the seller is making his counteroffer. If the seller agrees to the terms of the contract, then there is “acceptance.” The result would be a mutual agreement between the two parties, making the contract binding.

Unilateral and Bilateral Contracts

A real estate contract can either be unilateral or bilateral depending on the kind of deal you’re making. If you are involved with a sales deal, for example, the contract would have to be bilateral. This means that it’s a two-way agreement wherein the seller agrees to sell and the buyer agrees to buy. The bilateral contract is most often used in real estate, since almost all the deals require the assent of both parties.

If you’re involved with options, however, a unilateral agreement is appropriate since in this kind of deal the seller is obligated to sell but the buyer is not obligated to buy.

Basic Requirements Of a Contract

Each state has its own standards and criteria for the real estate contracts. But all contracts more or less have most legal requirements in common.

Written and In Print: Verbal agreement is not enough when it comes to real estate deals. Real estate contracts have to be in writing for it to be enforceable.

Identification of Both Parties: The contract must clearly state the identification of both parties. It may not be really legally required, but full names and middle initials helps to avoid possible mistaken identities or misunderstandings.

The Property: The property to be sold and bought should of course be written down, along with a legal description and location.

Purchase Price: The purchase price of the property must also be written in the contract. If the purchase price has not yet been determined, you can state a reasonably ascertainable figure in the contract.

Mutual Assent: Mutual agreement is the most important criteria in a contract to be binding. This is especially important as almost all real estate contracts are bilateral and can only be enforced with both the parties’ agreement.

Signatures: For the contract to be enforceable, it has to be signed by both parties. The law requires both parties signing to be of legal sound and mind, of course. A facsimile signature is acceptable as long as it is stated in the contract that facsimile signatures are valid.

Consideration: Consideration is what induces a promise. It is something of value or interest bargained for in exchange of the property. It binds a contract and makes the contract enforceable. The amount won’t really matter, as long as there is a consideration. Money is the most common form of consideration, but another property, a promise to perform, or something else in value is acceptable.