Selling an inherited house: a complete guide

Most people who inherit a house did not plan to own one. The estate is open, the relatives are scattered, and the property is sitting empty while everyone decides what to do with it. This guide covers what happens next, in the order it usually comes up: who is allowed to sign, whether probate has to finish first, what the house costs to keep in the meantime, what the tax bill looks like, and how to sell from out of state.

It is written for heirs anywhere in the United States. Probate procedure, deadlines, and some tax rules vary by state, so where an answer depends on where the house is, this guide says so and tells you who to ask.

Key takeaways

• Who can sign depends on how the house passes to its new owners: through probate, a trust, or another route allowed by state law.
• You can usually accept an offer during probate, but you cannot close until the court confirms who has authority to sell.
• Holding costs start the day the owner dies and come out of the estate until closing.
• The cost basis resets to the value on the date of death, so most heirs owe little or no income tax on the sale.
• Whether the house needs repairs or clearing out depends on which buyer you sell to.

Who is allowed to sell an inherited house?

When the house goes through probate, the person the court has appointed as executor or personal representative of the estate can sell it. If the house is held in a trust, the successor trustee can usually sell it. Being named executor in the will is not enough on its own. Until the court issues the appointment (often called letters testamentary or letters of administration), that person cannot sign a deed on the estate's behalf.

For a probate sale, that appointment is the first document any buyer, title company, or closing attorney will ask for. If the house passes outside probate, they will need documents establishing the new owners' title instead.

What if the house is in a trust?

The successor trustee named in the trust can usually sell without going through probate at all. The trust already owns the house, so no court order is needed to transfer it. This is the fastest path, and the reason to check how the property is titled before assuming probate applies. The deed on file with the county recorder shows whether the owner of record was the person who died or a trust.

What if several heirs inherited it together?

Then every heir with an ownership interest has to agree to the sale and sign at closing. In practice that ends one of three ways:

• All heirs agree to sell and split the proceeds according to the will or the state's intestacy rules.
• One heir buys out the others, usually with a mortgage against the house.
• Nobody agrees and someone files a partition action, which asks a judge to order the sale. Partition takes months, the legal fees come out of everyone's share, and the house usually sells for less than a cooperative sale would have brought.

Do you have to go through probate before you can sell?

Not always. Probate is required only when the house was titled in the deceased owner's name alone and nothing else passes it automatically. The house skips probate when it was:

• held in a living trust,
• owned as joint tenants with right of survivorship, or by spouses as tenants by the entirety, so the surviving co-owner takes it outright, or
• covered by a transfer-on-death deed (sometimes called a beneficiary deed) in a state that allows them.

Some states also offer a simplified or small-estate procedure when the whole estate is under a set value, which shortens the process.

If no alternative applies under state law, probate is required. That does not mean the sale has to wait for probate to end. In most states the personal representative can list the house, take offers, and sign a contract while the estate is open. What cannot happen is closing. Title cannot transfer until the court has confirmed the representative's authority, and in some courts the sale price itself needs approval. The clerk of the probate court in the county where the owner lived can tell you which rules apply, and a probate attorney can tell you how long they will take.

Affidavit of heirship

An affidavit of heirship is a sworn statement identifying a deceased owner's heirs and family history. In states such as Texas, heirs may be able to use one to sell a house without formal probate when the owner died without a will. The affidavit is recorded in the county where the property sits. Texas Law Help explains how it works.

The affidavit does not transfer title by itself, and a title company may require more proof before accepting it for a sale. Before paying to prepare or file one, ask the title company or a local probate attorney whether it will work for the house, which witnesses must sign, and what else you need to close.

How long does it take to sell an inherited house?

From death to closing, plan on six to twelve months when probate is involved and one to three months when it is not. Nearly all of that time is procedure rather than the sale itself.

The two things an heir controls are how quickly the probate petition gets filed and which kind of buyer they sell to.

What does it cost to hold the house while you decide?

Every month the house stays in the estate costs money, and the estate, which in the end means the heirs, pays all of it.

Insurance is the biggest jump in the table. A standard homeowner policy generally stops covering a house that has been unoccupied for 30 to 60 days, and the vacant-property policy that replaces it costs a good deal more.

Add up six months of the table above before you decide anything else. That figure is what waiting for a better price costs, and it goes into the comparison at the end of this guide.

Do you pay taxes when you sell an inherited house?

Usually little or none. For federal income tax, the house's cost basis resets to its fair market value on the date the owner died, which is known as the stepped-up basis. You owe capital gains tax only on the amount the house sold for above that value, after selling costs. A house worth $300,000 at death that sells for $310,000 six months later produces a taxable gain of roughly $10,000 before selling costs, not a gain on the full $310,000.

Because the basis resets, the price the owner originally paid does not matter. A house bought decades ago for a fraction of its current value carries no built-in gain for the heir.

Gains on inherited property are treated as long-term no matter how long you held the house, so the lower long-term rate applies if there is any gain at all.

Get a written appraisal or broker's opinion of value dated as close to the date of death as possible. It is your evidence for the basis, and it is much harder to reconstruct a year later.

Federal estate tax applies only to estates worth well above a multi-million-dollar exemption, so it does not touch most families. A handful of states levy their own estate or inheritance tax with lower thresholds. This guide does not cover state tax, and none of it is tax advice. Confirm the numbers with a CPA or tax preparer before you file.

What happens to a mortgage on an inherited house?

The mortgage stays attached to the house and is paid off out of the sale proceeds at closing. Whatever is left after the payoff, commissions, and closing costs goes to the estate.

Until closing, someone has to keep the payments current. The lender does not forgive payments because the borrower died, and it can foreclose on a house in an estate the same way it can on any other. If the loan has already fallen behind, our guide to selling a house in foreclosure covers how much time the timeline gives you. Federal rules generally let an heir who inherits the house take over the existing loan without qualifying for it, which matters if a relative wants to keep the house, but that does not pause the payments in the meantime.

Contact the loan servicer as soon as you can, send a copy of the death certificate, and ask for a payoff statement once you have a closing date. If the house has a reverse mortgage, the loan became due at death and there is a deadline to sell or refinance, usually about six months with extensions available. The FAQ at the end of this guide covers that case.

Should you clear out the house before you sell?

Only if you are selling on the open market. A buyer who is getting a mortgage expects to walk through an empty, clean, showable house, and the listing photos need it that way too. A cash buyer purchasing as-is will usually take the house with whatever is left in it, so you keep what you want and leave the rest.

Budget time and money for clearing a house a relative lived in for decades:

• Sort first, then clear. Pull out documents, photographs, jewelry, and anything the will names before anyone else goes through the house.
• An estate sale company will run a sale in the house for a commission on what sells, commonly 30 to 50 percent, and many will clear what is left for a fee.
• A junk removal service or a dumpster rental handles the rest. A full house is often several truckloads.
• Plan on two to six weeks if you are doing it yourself from out of town, spread over several trips.

If that timeline or the travel is the problem, sell as-is and skip the clear-out.

Do you need to make repairs before selling?

That depends on which buyer you sell to.

1. On the open market. The buyer's lender sends an appraiser and the buyer sends an inspector. Anything that affects safety or structure (roof, electrical, plumbing, a furnace that does not run) will either be required before closing or come off the price. Cosmetic work is optional, but it shows in the photos and the offers. Expect 30 to 90 days of work before listing.
2. To a cash buyer. The house is bought in its present condition. Nothing is repaired, cleaned, or staged, and there is no appraisal or lender to satisfy.

The open market usually produces the higher headline price. The cash sale produces a lower one, sooner, with no repair spend and no carrying costs while the work happens. Which one nets more depends on how much work the house needs and how long it would take you to get it done. The comparison below shows how to run that math.

Can you sell an inherited house from out of state?

Yes, and it is common. Nothing about selling a house requires you to be there. Closing documents can be signed remotely in front of a notary and sent overnight, and many title companies offer fully online closings where the state allows them. The parts you cannot do remotely, walking the house, meeting an inspector, or clearing it out, can be done by someone local: a relative, a property manager, a real estate agent, or, with an as-is sale, the buyer.

What makes an out-of-state sale hard is coordination. Every showing, contractor visit, and inspection has to be arranged from several time zones away, on a house nobody is checking on between visits. Sellers who cannot manage that from a distance tend to prefer a buyer who takes the house as it stands.

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Someone relocating for a job who can't afford to pay two mortgage payments, or a family selling an inherited property out of state, can benefit from a guaranteed sale without the hassle of repairs and showings.

If you do list from out of state, give one local person written authority to act for you (a limited power of attorney covers this), have the locks changed, and move the utilities and insurance into your name or the estate's so the bills reach someone who will pay them.

How do you decide between listing and a cash offer?

Compare what each path leaves in your pocket after every cost. The headline price of a listing is the biggest number on the page, and it is also the one you never receive.

Suppose the house would list for $250,000 and a cash buyer offers $215,000. On the listing, subtract $15,000 in commission, $12,000 to clear and repair, and $9,000 for five months of carrying costs, and the estate nets about $214,000. The cash offer nets about $215,000 in three weeks, less any closing costs the buyer does not cover. On a house that needs less work, the listing wins. On a house that needs more, or that is far away, the cash sale often does. Run the numbers for your house before assuming either answer.

Getting a cash offer costs nothing and commits you to nothing, so the practical move is to get one and use it as the floor in this comparison. Our three-step process explains how the offer is put together.

Where to start

Three things, in this order, before you talk to any buyer or agent:

1. Find out how the house is titled. Pull the deed from the county recorder's office (many are online). It tells you whether probate applies at all and who has authority to sell.
2. Put six months of holding costs on paper: mortgage, taxes, insurance, utilities, dues, and travel. It is the carrying-cost line in the comparison above.
3. Get the date-of-death value documented. An appraisal or broker's opinion of value dated near the death sets your tax basis and doubles as a realistic starting point for pricing.

With those three facts in hand you can compare a listing against an as-is offer on real numbers. If you want that offer as your floor, request one here, or read more of our guides on selling inherited property and the rest of the blog first.