Sell Land By Owner
North Dakota

The Complete Guide to Selling Land By Owner in North Dakota: Navigating Split Estates and the Bakken Boom

Understanding North Dakota's Split Estate Reality

What is a Split Estate?

A "split estate" means surface rights are owned by one party while mineral rights (oil, gas, coal, other minerals) are owned by another party. In North Dakota, this isn't an exception - it's the NORM. Approximately 75% of North Dakota land has severed mineral rights. Here's how it happened: When the federal government distributed land through the Homestead Act (1860s-1930s), and when railroads sold land grants, they often retained the mineral rights. A farmer might receive 160 acres of surface for farming, but the federal government or Northern Pacific Railroad kept the rights to any oil, gas, or coal beneath. Over the following 100+ years, surface ownership typically stayed with one farm family, passing from generation to generation. But mineral ownership fragmented through inheritance, sales, and transfers - spreading among dozens, hundreds, or even thousands of different owners. By the time the Bakken boom hit in 2008, revealing billions of barrels of oil beneath North Dakota, most landowners discovered they owned the surface but NOT the minerals beneath it.

How Split Estates Affect Land Sales

When you sell North Dakota land, you need to understand that you're typically selling ONLY the surface rights - not the mineral rights. This has massive implications. First, the deed must explicitly state what minerals (if any) convey with the sale. Common language includes "Surface rights only, grantor reserves all oil, gas, and minerals" or "Surface rights only, all minerals previously severed by prior owner in deed dated [date]." If you DO own minerals (either all or a percentage), you face a decision: (1) Sell the minerals with the surface for a higher total price, (2) Sell surface and minerals in completely separate transactions (to different buyers if desired), or (3) Reserve the minerals and keep them while selling only the surface. Most North Dakota landowners who own minerals choose option 3 - they sell their surface to a farmer or buyer, but reserve the minerals for themselves or their heirs. This allows them to continue receiving royalty payments if the land is producing oil/gas, and retain the upside potential if oil prices rise or new wells are drilled. Mineral rights in proven Bakken producing areas can be worth more than the surface itself.

Surface Owner Obligations Under Split Estate

Here's the part that surprises many North Dakota surface owners: Even if you don't own the minerals beneath your land, the mineral owner has the legal right to "reasonable use" of your surface to extract those minerals. This is called the "dominant estate doctrine" - mineral rights are legally dominant over surface rights. In practice, this means an oil company (if they lease the mineral rights from whoever owns them) can come onto YOUR surface land to drill wells, build access roads, install pipelines, place tank batteries, and operate equipment - even if you receive zero royalty income (because you don't own the minerals). You're entitled to compensation for surface damage - typically negotiated as a one-time payment of $10,000-$50,000 for a well pad location, plus additional payments for pipeline easements and access roads. You cannot prevent the mineral development, but you can negotiate the terms through a "surface use agreement" covering advance notice requirements, location restrictions (avoiding buildings, fences, water sources), reclamation timeline, and damage compensation. When selling land with severed minerals, full disclosure of this situation is critical - buyers need to understand they're purchasing surface rights with limited control if future mineral development occurs.

Title Complexity in North Dakota

North Dakota mineral titles are notoriously complex. Unlike surface ownership (which typically has a clean chain going back to the original homestead patent), mineral ownership often involves: fractured interests (one mineral tract might have 500 owners, each owning 0.02%), missing deeds (mineral transactions from the 1920s-1950s that were never properly recorded), conflicting legal descriptions (especially in areas surveyed under different systems), unresolved heirship (original mineral owner died in 1940 without a will, now has 200 unknown heirs), and unreleased oil/gas leases (showing as active in records but actually expired decades ago). This is why an experienced North Dakota land attorney is essential - not just any real estate lawyer, but one who specializes in mineral rights and split estates. The title work alone can take weeks and cost $500-$2,000 for a thorough mineral title search going back 50+ years. But this investment is necessary - selling land with unclear mineral rights is asking for litigation and title insurance claims down the road.

The Bakken Boom: How Oil Transformed North Dakota Land Values

Pre-Boom Reality (Before 2008)

Before the Bakken boom, western North Dakota was experiencing steady rural depopulation. Young people left for college and jobs in Fargo, Bismarck, or out of state. Family farms and ranches were consolidating. Small towns were losing their grocery stores and schools. Agricultural land in Williams County (now the epicenter of the oil patch) sold for $500-$1,500 per acre based purely on grazing capacity. The region was beautiful but quiet - endless prairie, scattered farms, wide open spaces, and not much economic activity beyond agriculture. People knew the Bakken Formation existed (geologists had identified it in the 1950s), but it was considered uneconomical to develop. The rock was too tight, the oil too hard to extract profitably.

The Boom Years (2008-2014)

Then came the revolution: horizontal drilling combined with hydraulic fracturing (fracking). This technology unlocked the Bakken Formation - a layer of oil-rich shale sitting 10,000-11,000 feet below the surface across western North Dakota. Production exploded from 100,000 barrels per day in 2008 to over 1.2 million barrels per day by 2014. Williston, a quiet town of 12,000, became a Wild West boomtown with $150,000 oil field jobs, hotels booked solid at $300/night, man camps housing thousands of workers, and restaurants struggling to stay open because they couldn't hire staff (everyone was working in the oil fields for triple the wage). Land values went ballistic. That Williams County agricultural land selling for $1,000/acre in 2007 hit $15,000-$25,000/acre by 2012-2013 - even though its agricultural productivity hadn't changed at all. The value wasn't for farming anymore; it was for oil potential. Mineral rights in proven producing areas sold for $50,000-$150,000+ per acre. A farmer who owned 320 acres of surface and minerals could suddenly be worth $10+ million just from mineral rights - more wealth than the family had accumulated in 100 years of farming. Traffic on rural roads increased 10-fold. Crime rose. Housing was impossible to find. The boom was lucrative but chaotic.

The Bust (2015-2020)

Then came the crash. Oil prices collapsed from $100/barrel in mid-2014 to below $30/barrel by early 2016. Drilling rigs that had numbered over 200 across North Dakota dropped to 20-30. Thousands of workers left. Man camps emptied. Traffic returned to normal. Land values dropped 30-50% from peak. Some speculators who paid $20,000/acre in 2013 couldn't sell for $12,000/acre in 2017. The crash was a harsh reality check, but it also cleared out the speculators and left a more sustainable industry focused on the most productive core areas.

Current Reality (2024-2025)

Today, North Dakota has stabilized at a "new normal." Oil production remains strong at 1.0-1.2 million barrels per day with oil prices in the $70-$85/barrel range. The industry is mature now, with better infrastructure, more efficient operations, and less chaos. Land values in core Bakken counties (Williams, McKenzie, Mountrail) remain 3-5 times higher than pre-boom levels, though below 2013-2014 peaks. A key shift: buyers are now much more sophisticated. They understand oil price volatility, differentiate between proven producing areas and marginal zones, and price mineral rights based on actual well performance data rather than pure speculation. For sellers, this means realistic pricing based on comparable sales, proper documentation of mineral ownership and production history, and understanding that western North Dakota land is now fundamentally an energy asset first and an agricultural asset second.

No Transfer Tax: North Dakota's Hidden Advantage

One of North Dakota's most landowner-friendly features is often overlooked: the state has absolutely NO real estate transfer tax or documentary stamps. When you sell land in North Dakota, the ONLY government fee you pay is the county recording fee - typically $30-$50 to record the deed at the county Register of Deeds office. That's it. Compare this to other states: In New York, you pay $2 per $500 of sale price (plus NYC adds another $1-$1.50 per $500, and the "mansion tax" adds 1-3.9% on properties over $1 million). In New Jersey, the combined state and local transfer taxes can reach 2-3% of sale price. In North Carolina, it's $2 per $1,000. On a $500,000 land sale, here's what you'd pay: North Dakota = $50 recording fee. New York = $2,000+ in state transfer tax (more if in NYC or over mansion tax threshold). New Jersey = $10,000-$15,000 in combined state and local transfer taxes. Pennsylvania = $5,000 combined. Even states considered "low tax" like Florida or Texas charge $700-$770 per $100,000. North Dakota's zero transfer tax policy makes it one of the absolute cheapest states in the nation for real estate transactions. For sellers, this is pure savings - thousands of dollars that stay in your pocket rather than going to the state. There's no calculation to make, no surprise tax bill at closing. You simply pay the county clerk $30-$50, and your deed is recorded.

Mineral Rights: Sell, Keep, or Split?

Option 1: Reserve All Minerals (Most Common)

If you own mineral rights (even a fractional percentage), the most common approach among North Dakota landowners is to sell the surface while reserving ALL mineral rights for yourself. The deed includes language like: "Grantor hereby conveys the surface rights only, reserving unto Grantor, their heirs and assigns, all oil, gas, and minerals." This means the buyer gets the surface land for farming, ranching, building, or recreation - but YOU keep the mineral rights. If the land is producing oil/gas, you continue receiving royalty checks. If it's not producing, you retain the potential if future drilling occurs or oil prices rise. Many North Dakota families view mineral rights as a multi-generational asset - something to pass to children and grandchildren. The downside? Reserving minerals reduces your surface sale price. Buyers know they're getting surface only, so they pay surface-only value ($3,000-$10,000/acre for agricultural use) rather than bundled surface-plus-minerals value. But most ND sellers prefer this - especially if royalty income is significant or if they believe oil prices will rise long-term.

Option 2: Sell Everything Together

Some sellers choose to sell surface AND minerals together in one transaction to one buyer. This maximizes your immediate cash payment and simplifies the transaction (one deed, one buyer, one closing). This approach makes sense if: (1) Your minerals are not producing and have minimal potential, (2) You need maximum cash now rather than potential future royalties, (3) You don't have heirs to pass minerals to, (4) You don't want the ongoing administrative burden of mineral ownership (tracking royalties, dealing with oil companies, tax complications). If selling surface and minerals together in a proven Bakken area, get separate appraisals for surface value and mineral value. Mineral rights in producing areas can be worth MORE than the surface. Don't just add 10-20% to your surface price and call it good - you could be leaving $100,000+ on the table. Use a mineral rights appraiser who can evaluate: current production rates, remaining reserves, well decline curves, and comparable mineral sales.

Option 3: Split the Minerals

A compromise approach is selling the surface with 50% of minerals while reserving 50% for yourself. The deed specifies: "Grantor conveys surface rights together with an undivided 50% interest in all oil, gas, and minerals, reserving unto Grantor an undivided 50% interest in all oil, gas, and minerals." This gives the buyer some upside potential (they might get royalties if drilling occurs), while you retain significant mineral interest. This can make your surface more attractive to buyers, potentially bringing a higher price, while still keeping substantial mineral rights. The complexity: both parties receive royalty checks if production occurs (split according to ownership percentage), both must be contacted for future oil/gas leasing decisions, and the fractured ownership adds complexity to title. However, in competitive land markets, offering 50% minerals with surface can be the difference between a quick sale and property sitting for months.

Vacant Land Disclosure: Not Required But Strongly Recommended

North Dakota is one of only a handful of states with NO mandatory property disclosure law for vacant land sales. Unlike North Carolina, New Jersey, New York, and most other states (which require sellers to complete detailed disclosure forms), North Dakota imposes no such legal obligation. You could technically sell land with zero written disclosure. However, just because disclosure isn't legally required doesn't mean you shouldn't do it. Under common law fraud and misrepresentation principles, sellers remain liable for intentionally concealing known defects or making false statements. If you know your land has contaminated groundwater, a severed mineral rights situation allowing imminent drilling, or an unrecorded pipeline easement - and you don't disclose it - the buyer can sue you for fraud even without a disclosure law. The smart approach: complete a voluntary disclosure form even though North Dakota doesn't require it. Either use the ND REALTORS® standard Vacant Land Disclosure form, or have your attorney draft a custom disclosure. Cover: mineral rights ownership (what percentage you own, what's severed, what production exists), all oil/gas activity (active wells, pipelines, leases, royalty payments), all easements (recorded and unrecorded), access rights and road maintenance, utilities availability, soil quality and past agricultural use, flooding or drainage issues, environmental concerns, and anything else a reasonable buyer would want to know. Write "unknown" for anything you truly don't know - you're not expected to be omniscient. The point is honest disclosure of what you DO know. This disclosure protects you legally and builds buyer trust.

Regional Selling Strategies Across North Dakota

Bakken Oil Patch (Northwest): When selling land in Williams, McKenzie, Mountrail, or Dunn counties, you're marketing either TO the oil industry or AWAY from it - rarely neutral. If your land has oil infrastructure (well pads, pipelines, access roads), target buyers who see this as a positive: oil field workers looking for land with mineral potential, speculators hoping for more drilling, or ranchers accepting oil activity as revenue supplement. Emphasize: existing infrastructure (reduces costs for future drilling), proven production history (if minerals convey), income potential from surface damage payments, and access to oil field jobs. If your land is pristine without oil activity, target buyers seeking the opposite: recreational buyers, lifestyle ranchers, or investors betting on long-term agricultural value return. Emphasize: no noise/traffic from drilling, scenic Badlands views, hunting opportunities, and distance from industrial activity. Either way, detailed disclosure of mineral ownership and any oil activity is absolutely critical. Price volatility is higher here than anywhere else in the state - track recent comparable sales carefully, consider professional appraisal, or use auction format to find true market price.

Red River Valley (Northeast): This is the most stable, straightforward land market in North Dakota. Selling land in Cass, Grand Forks, Walsh, Pembina, or Traill counties? You're marketing agricultural productivity, period. Buyers are serious row-crop farmers evaluating: soil quality (clay loam is gold here), drainage (tile-drained land commands premium), crop history (yield records for corn, soybeans, wheat, sugar beets), and access to markets. Price per acre is based on productive capacity and current cash rent rates. Get soil maps, yield records, and rental history documentation. Mineral rights are usually severed but not valuable (minimal oil activity in eastern ND). Market through agricultural channels: NDSU Extension, Farm Credit, local farm auctions, and word-of-mouth (farming community is tight-knit). Price at recent comparable sales per acre for similar soil class. This market moves on fundamentals, not speculation.

Why Sell Land By Owner in North Dakota

The financial case for selling land by owner in North Dakota is compelling. First, commission savings: typical 6-10% real estate commission on a $500,000 land sale means $30,000-$50,000 in fees. On a $1 million Bakken property, that's $60,000-$100,000. When you sell by owner, you keep that money. Second, North Dakota's zero transfer tax means you don't have the massive state/local tax burden added to commission that sellers in New Jersey or New York face. Your only costs are: county recording fee ($30-$50), attorney for deed review and title work ($800-$2,500 depending on complexity), and survey if needed ($2,000-$8,000). Total out-of-pocket might be $3,000-$11,000 versus $30,000-$100,000 in commission. Third, mineral rights control: when you sell FSBO, YOU control the decision on keeping or selling your mineral rights. Some agents push sellers to include minerals (because it increases sale price and their commission) when the seller would be better off reserving minerals long-term. Direct control eliminates this pressure. Fourth, mineral rights expertise: most residential real estate agents don't understand North Dakota split estates. They're trained in home sales, not complex mineral title issues. Selling by owner lets you hire a specialized ND land attorney who actually understands mineral rights, split estates, Bakken valuations, and surface use agreements. Finally, land buyers in rural North Dakota are accustomed to FSBO transactions. Unlike urban home buyers who expect agents, rural land buyers often prefer dealing directly with the seller. There's no stigma or suspicion about for-sale-by-owner land - it's common and accepted.