Family home with moving boxes on the porch during the sale of an inherited house

Selling an Inherited House: A Practical Guide

A stepped-up tax basis resets your cost basis to the home's value on the date of death, which can shrink capital gains tax to nearly zero if you sell soon after inheriting.

First Steps After Inheriting a House

Inheriting a house does not automatically hand you the right to sell it. Before you list the property, you generally need to work through several practical and legal steps, most of which start with the probate process. In many cases the sale itself can close before probate formally ends: the proceeds simply go into the estate account and are used to pay outstanding debts, taxes, and fees before whatever is left is distributed to the heirs.

Secure the property immediately: change the locks, notify the homeowner's insurance carrier, and confirm coverage stays active while the house sits vacant.
Locate the will, if one exists, and confirm who the court has named as executor or administrator.
Wait for Letters Testamentary or Letters of Administration before signing any sale contract; without them, no one, not even a sole heir, can convey clear title.
Order a date-of-death appraisal, which becomes the foundation for the property's tax basis (see the next section).
Talk with the other heirs early about whether to sell, rent, or keep the house, since disagreements are far easier to resolve before a listing goes live.
Consult a probate attorney or CPA about your state's timeline and any state-level estate or inheritance tax exposure.

Executors working under independent administration can generally list and sell the house without asking the court for approval at every step, relying instead on notice to interested parties. Under supervised (dependent) administration, the sale usually needs a court order and a confirmation hearing, and a higher bidder can sometimes outbid the accepted offer at that hearing. Either way, it helps to have a rough sense of how long the probate process usually takes before you commit to a closing date.

Total timelines vary widely, but a full probate case in 2025 and 2026 usually runs about 9 to 12 months from filing to final distribution, and complex or contested estates can take 18 months or longer. If the property was held in joint tenancy with right of survivorship, passed through a transfer-on-death deed, or sat inside a funded revocable living trust, the house may pass to you outside probate entirely, in which case these court-driven timelines and the steps above may not apply at all.

The Stepped-Up Basis Rule: Why It Matters for Your Taxes

The single biggest tax advantage of selling an inherited house comes from what the IRS calls a stepped-up basis. Under Internal Revenue Code Section 1014, the cost basis of inherited property is not what the original owner paid for it; it resets to the property's fair market value on the date of death, as described in IRS Publication 551. That reset can eliminate most or all of the capital gains tax that would otherwise apply, which is one reason the taxes on selling an inherited house are often lower than heirs expect.

Illustration only, not a real transaction: suppose a parent bought a house decades ago for $100,000, and it is worth $1,000,000 on the date of death. Under the stepped-up basis rule, the heir's cost basis becomes $1,000,000, not $100,000. If the heir then sells for close to that value, there is little or no taxable gain, because tax applies only to appreciation after the date of death, not before it.

Any gain that does apply is automatically treated as a long-term capital gain, regardless of how briefly the heir has owned the house, which generally means a lower tax rate than short-term treatment would allow. Because the appraisal at death sets the baseline for this calculation, a professional date-of-death appraisal is worth getting even if the house will not sell for months.

Why the Home-Sale Tax Exclusion Usually Does Not Apply

Homeowners who sell their primary residence can often exclude up to $250,000 of gain, or $500,000 for a married couple filing jointly, under Internal Revenue Code Section 121. Heirs selling an inherited home usually cannot use this exclusion, because the house was not their primary residence: per IRS Publication 523, the exclusion is generally tied to the seller having owned and lived in the property as their main home for a qualifying period before the sale.

A surviving spouse may have a narrower path to some version of the exclusion in certain circumstances, since spousal ownership and residency rules differ from those for other heirs; this is a fact-specific question best checked with a tax professional.
Whether an heir who later moves into the inherited house could qualify on a future sale depends on ownership and residency rules that are outside the scope of this guide — ask a CPA before counting on it.
Because these rules interact with state law and individual circumstances, treat any exclusion estimate as a starting point for a conversation with a CPA, not a final answer.

In practice, most heirs lean on the stepped-up basis discussed above rather than the home-sale exclusion, since the stepped-up basis alone often shrinks the taxable gain close to zero without requiring anyone to move in and establish residency.

the United States probate house sale — Why the Home-Sale Tax Exclusion Usually Does Not Apply

State Estate and Inheritance Taxes

On top of any federal considerations, a number of states levy their own estate tax, inheritance tax, or both. The federal estate tax exemption for 2026 is $15,000,000 for an individual and $30,000,000 for a married couple, under the One Big Beautiful Bill Act passed in July 2025, and there is no federal inheritance tax. State rules are a different story and can apply at far lower thresholds.

State	Tax Type	Approximate 2026 Exemption or Rate
Oregon	Estate tax	Exemption around $1,000,000
Massachusetts	Estate tax	Exemption around $2,000,000
Minnesota	Estate tax	Exemption around $3,000,000
Washington	Estate tax	Exemption around $3,000,000
Illinois	Estate tax	Exemption around $4,000,000
Maryland	Estate and inheritance tax	Estate exemption around $5,000,000
Hawaii	Estate tax	Exemption around $5,500,000
New York	Estate tax	Exemption around $7,000,000
Connecticut	Estate tax	Exemption matches the federal baseline
Pennsylvania	Inheritance tax	4.5% for children, 12% for siblings, 15% for other heirs

These figures are approximate and change with legislation; verify the current exemption and rate for your state before making a decision, ideally with a local probate attorney or CPA. Spouses are exempt from inheritance tax in every state that levies one.

Beyond Pennsylvania, other states that impose an inheritance tax, a tax on what the heir receives, distinct from an estate tax on the estate itself, include New Jersey, Nebraska, Maryland, Kentucky, and Iowa. Because inheritance tax generally depends on the heir's relationship to the deceased, a sibling or unrelated beneficiary can owe meaningfully more than a child would on the same inherited house.

Comparing Your Four Options for Selling

Once you are clear to sell, heirs typically choose among four broad paths, each trading price against speed and effort. Selling an inherited home on the open market through a real estate agent generally nets the highest price but takes the longest and often requires clearing out belongings and making repairs first. The discount ranges below are industry estimates drawn from market practice — unlike the statutes cited elsewhere on this page, they are not figures fixed by law.

Selling Option	Typical Speed	Typical Trade-off
Open market listing	Slower, often months	Highest likely price, but needs clean-out, repairs, and showings
Cash investor or house-buying company	Fast, often in weeks	Sells as-is, but typically 20% to 40% below after-repair value, minus repair costs, per market practice
iBuyer (algorithmic online buyer)	Fast, weeks	Often roughly 5% to 12% below market value, plus a service fee of around 5%
Auction	Fixed sale date	Often nets about 10% to 15% less than a traditional listing, with a buyer pool weighted toward investors

Realtor commissions on an open-market sale have historically run around 5% to 6% total, though since the 2024 National Association of Realtors settlement, sellers now negotiate the listing fee directly and separately decide what, if anything, to offer a buyer's agent. If some heirs need cash before the house closes, whether to cover their own expenses or simply because probate is taking a while, an inheritance cash advance is worth understanding as a separate option from the sale itself — it is typically structured as assigning part of an expected inheritance to a provider, not as a way of selling the house faster.

When Heirs Disagree About Selling

Selling inherited property with multiple owners runs smoothly only when everyone agrees. In most states, all heirs who hold title need to consent to a private sale, since a buyer's title company generally will not insure a sale signed by only some of the co-owners.

Do all heirs have to agree to sell property?

Not necessarily forever, but as a practical matter, yes, in the short term. If even one co-heir refuses to sign, the others cannot force a private sale through negotiation alone. What they can do is ask a court to intervene, which is where a partition action comes in.

A partition action lets any co-heir petition a court to force a sale, or in some cases a physical division, of jointly owned property, even over another heir's objection.
More than 20 states have adopted the Uniform Partition of Heirs Property Act (UPHPA), which requires an independent appraisal before a forced sale and gives non-selling co-heirs a right of first refusal to buy out the requesting heir at the appraised value.
Under UPHPA, courts generally favor an open-market listing over a judicial auction when it is likely to bring a better price for everyone involved.
Because a partition action adds legal cost and time on top of the probate process itself, most co-heirs are better served by negotiating a buyout or a sale agreement before filing one.

If your household is weighing these options, it can help to first read the national probate house sale overview for a sense of how the broader sale process typically unfolds before deciding whether a partition action is worth pursuing.

the United States probate house sale — When Heirs Disagree About Selling

Selling a House With a Mortgage Still Attached

An inherited house often comes with a loan still attached — an existing mortgage or a reverse mortgage. What happens if you inherit a house with a mortgage depends largely on which type of loan is in place.

A Regular Mortgage

Under the federal Garn-St Germain Act of 1982, a lender cannot call a mortgage due simply because the home passed to a relative on the owner's death. That means an heir can generally keep making payments on the existing loan under its original terms, rather than being forced to immediately refinance or pay it off, while the sale is arranged.

A Reverse Mortgage (HECM)

A reverse mortgage becomes due when the borrower dies. Heirs are typically given a window of months, often up to about six months, with possible extensions available through HUD, to sell the house, refinance it, or pay off the loan. One option worth knowing about: heirs can often satisfy a HECM balance by paying 95% of the home's current appraised value, even if the loan balance itself is higher, though the exact terms and any extension depend on the servicer and should be confirmed directly rather than assumed.

There is no single universal deadline for reverse-mortgage payoff after death; timelines and extensions vary by servicer and circumstance. Contact the loan servicer promptly after the owner's death to confirm the exact window you are working with.

Liens, Unpaid Property Taxes, and Medicaid Estate Recovery

Before any sale proceeds reach the heirs, outstanding liens and debts tied to the house typically have to be cleared. Unpaid property taxes are a common example, and they attach to the property itself, not just to the deceased owner, so a buyer's title company will require them to be paid at or before closing.

Mechanic's liens or contractor liens from unpaid renovation or repair work stay attached to the property and must be resolved before a clean sale can close.
Judgment liens against the deceased owner can also attach to the house and need to be satisfied from the estate.
A state may also claim against the estate through Medicaid Estate Recovery (MERP) for long-term care benefits paid on behalf of the deceased after age 55; where it applies, this claim is typically paid as a lien satisfied out of the sale proceeds, so it is worth checking with the estate attorney whether MERP may apply before you count on a specific net amount from the sale.

Executor and attorney fees also come out of the estate before heirs are paid, and some states set these by statute rather than leaving them to negotiation. California, for example, uses a sliding schedule under Probate Code Section 10810: 4% of the first $100,000, 3% of the next $100,000, 2% of the next $800,000, and 1% of the next $9,000,000, applied separately to both the executor and the attorney. Most other states instead call for "reasonable compensation," which in practice often works out to roughly $250 to $600 an hour for the attorney's time.

Court filing fees during probate itself add a smaller but real cost, often a few hundred dollars, though the exact amount varies by county; California's initial petition fee, for example, runs $435. None of these costs are unique to a sale, but they do reduce what is ultimately left to distribute once the house sells.

Creditors also have a limited window to file claims against the estate, and unresolved claims can delay a sale or reduce what is left afterward. Windows vary by state: California allows 4 months from the date Letters are issued (Probate Code Section 9100), Florida allows 3 months from the first publication of notice to creditors (Section 733.702), and New York allows 7 months (SCPA Section 1802).

Documents You Need and Who Is Allowed to Sign

Every sale of an inherited house comes down to one question a title company will always ask: who has the legal authority to sign? Letters Testamentary, when there is a will, or Letters of Administration, when there is not, are the court-issued documents that answer it. Without them, no one can validly sign a purchase agreement, and no title insurer will issue a policy on the sale.

Letters Testamentary or Letters of Administration, issued by the probate court, naming the executor or administrator.
A certified copy of the death certificate.
The recorded will, if one exists, along with any codicils.
A date-of-death appraisal — strongly advised, since it anchors the stepped-up basis calculation.
In Texas, a muniment of title may substitute for a full administration in qualifying cases, where the will is admitted to pass title directly, without appointing an executor.
An affidavit of heirship in states that recognize it, though title insurers generally scrutinize these closely and may still require additional documentation before insuring a sale.

Small estate affidavits, which let some estates skip formal probate for modest personal property, generally do not extend to real estate; most title companies will not insure a sale based on one alone. Texas is a narrow exception: under Estates Code Section 205.001, a small estate affidavit can cover a homestead property when the deceased died without a will, the homestead passes to a surviving spouse or minor child, and non-exempt assets total $75,000 or less.

If your situation involves multiple heirs, unclear title, or a house that still has an outstanding mortgage, it is worth working through our complete probate FAQ alongside a local probate attorney before you sign anything, since the right combination of documents can differ meaningfully from one state, and one estate, to the next.

the United States probate house sale — Documents You Need and Who Is Allowed to Sign

Frequently Asked Questions

Do all heirs have to agree to sell property? ▾

In practice, yes, for a private sale: every heir who holds title generally needs to sign, or a title company will not insure the transaction. If one heir refuses, the others cannot simply outvote them; instead, a co-heir can file a partition action asking a court to order a sale.

Is there a time limit on selling inherited property? ▾

There is no single nationwide deadline that forces a sale by a specific date. What does create time pressure is practical: ongoing costs such as insurance, utilities, and property taxes accrue while the house sits, and if there is a mortgage or reverse mortgage, that loan has its own payoff window. For the probate process itself, the full probate timeline guide covers how long the surrounding steps usually take.

Can you sell a house before probate closes? ▾

Yes. A house can generally be sold while probate is still open, with the proceeds going into the estate account, where they are used to pay debts, taxes, and fees before whatever remains is distributed to the heirs.

What taxes on selling inherited house should I expect? ▾

Most heirs owe little or no federal capital gains tax, thanks to the stepped-up basis reset to the home's value on the date of death; tax generally applies only to appreciation after that date. Depending on your state, you may also need to check for a state estate tax or, in a handful of states such as Pennsylvania, a separate inheritance tax.

Selling inherited property with multiple owners: how does that work? ▾

Every co-owner generally needs to consent to a private sale. If the group cannot agree, any co-heir can petition for a partition action; in the 20-plus states that have adopted the Uniform Partition of Heirs Property Act, that process includes an independent appraisal and gives the other heirs a right of first refusal before a court orders an outside sale.

What happens if you inherit a house with a mortgage? ▾

You can typically keep making payments under the existing loan's original terms; the Garn-St Germain Act prevents a lender from calling the loan due just because ownership passed to a relative. A reverse mortgage works differently: it becomes due at death, and heirs typically get a window of months to sell, refinance, or pay it off.

Do I need a realtor to sell an inherited house? ▾

No, though most heirs use one for an open-market sale to reach the widest buyer pool and negotiate the highest price. Cash investors, iBuyers, and auction houses do not require a listing agent, but each of those routes generally trades some amount of price for speed and certainty.

What is the fastest way to sell inherited property? ▾

A cash investor sale is typically the fastest route, often closing in weeks, because it skips repairs, showings, and financing contingencies; in exchange, the price is typically 20% to 40% below after-repair value. An iBuyer is a more algorithmic version of the same trade-off, usually at a smaller discount.

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