Selling an inherited house: authority, documents and taxes

What to sort out before you sell a house you inherited, in the order it usually matters. Rules vary by state, so treat this as a map and confirm the details with a qualified professional.

1. Find out who can sign

The person who can sell depends on how the home passed:

• Through a will in probate: the executor or personal representative, once the court issues letters giving that authority.
• With no will: state law decides the heirs, and a court usually appoints an administrator. See selling a house after a death without a will.
• Through a trust: the successor trustee, under the trust's terms.
• Joint ownership with survivorship or a transfer-on-death deed: the surviving owner or named beneficiary, usually after recording the death certificate, where state law allows.

A buyer's title company will ask for proof of this authority, so it is the first thing to settle. More detail: selling a house in probate.

2. Protect the house while it is empty

• Tell the homeowner insurer the owner has died and the house is vacant. Policies may limit coverage for vacant homes.
• Keep utilities on enough to prevent frozen pipes and damage, change the locks and check the house regularly.
• Keep property tax, insurance and any mortgage payments current while the estate is settled.

3. If there is still a mortgage

Federal law generally stops a lender from calling a loan due only because a home with fewer than five units passed to a relative after the borrower's death (12 U.S.C. 1701j-3(d)). Payments are still due. Contact the servicer, tell them about the death and ask for a payoff quote; they may ask for documents showing you are the successor.

4. Taxes: the basis usually resets

Your tax basis in inherited property is generally its fair market value on the date of death, as explained in IRS Publication 551. That often means much less taxable gain than the original purchase price would suggest. A date-of-death appraisal helps document the value. See capital gains tax when selling a house and ask a tax professional about your situation.

5. Agree with the other heirs

If several people inherit, agree in writing on whether to sell, the lowest acceptable price, who handles the sale and how costs and proceeds are split. If one heir wants to keep the house, see selling a house to a family member.

6. Belongings and condition

Decide what family members keep before anything is cleared. Some buyers accept a house with belongings left inside; if so, put it in the contract. Compare clearing and repairing first with selling as-is using real quotes.

Documents to gather

• Death certificate copies
• The will or trust, and court letters if the estate is in probate
• The deed and any mortgage statements
• Property tax bill, insurance policy and utility accounts
• Any appraisal or valuation as of the date of death

Next steps

1. Build a selling plan for an inherited house, with no contact details required.
2. When you have offers or estimates, compare them side by side.
3. Read the full guide on selling an inherited house.

General information, not legal or tax advice. Probate, title and tax rules differ by state and by estate.