Selling an inherited house: a step-by-step guide

Before anyone can sell an inherited house, someone needs legal authority to sign the deed. How you get it depends on how the house was owned.

Probate rules differ by state, and some states let a representative sell without waiting for the estate to close. In Massachusetts, for example, a personal representative can sell real estate only if the will gives a power of sale or the court has issued a license to sell.¹

A transfer-on-death deed lets an owner name who gets the house at death, without probate, as long as the deed was properly signed and recorded before the owner died.

New York has allowed them since 2024. The deed must be signed in front of two witnesses, notarized and recorded before the owner’s death.²

California’s law also requires two witnesses and a notary.¹⁴

California’s transfer-on-death deed law is set to stay in effect until January 1, 2032.³

Based on our state research as of October 2026, Texas, California, New York, Georgia, Nevada, Missouri and Wisconsin allow transfer-on-death or beneficiary deeds. We found no such statute in Florida or Massachusetts.

New York’s small-estate procedure, for example, does not apply to any interest in real property.¹⁵

For federal tax, an heir’s basis in inherited property is generally its fair market value on the date of death.⁴ So if a house bought decades ago for $90,000 was worth $400,000 at death and sells for about that, there is usually little or no taxable gain. That is our illustration, not tax advice.

Gain or loss on inherited property is treated as long-term, regardless of how long you held it.⁵

The IRS says to report the sale on Form 8949 and Schedule D if you have a filing requirement.⁶

For deaths in 2026, the federal estate tax basic exclusion amount is $15,000,000.⁷

New York has its own estate tax, with a basic exclusion of $7,350,000 for deaths in 2026.⁸

Massachusetts requires an estate tax return when the gross estate plus adjusted taxable gifts exceeds $2,000,000.⁹ A date-of-death appraisal documents the basis and helps with both taxes. Ask a tax professional about your own situation.

Federal law generally bars a lender from enforcing a due-on-sale clause on a home with fewer than five units when the home passes to a relative because the borrower died.¹⁰ Federal rules tie this protection to a relative who lives or will live in the home. The payments still have to be made to avoid foreclosure, and a reverse mortgage is different: it generally becomes due when the last borrower dies.

Most mortgage servicers must have procedures to promptly tell a potential successor, once they learn of the death, what documents they need to confirm that person’s identity and ownership. Small servicers are exempt from this rule.¹¹

Once confirmed, a successor in interest is treated as a borrower under the federal servicing rules.¹² Write to the servicer early, ask what it needs, and ask for a payoff statement when you are ready to sell.

Many homeowners policies reduce coverage once a house has been vacant for a set period. In Wisconsin, for example, the insurance regulator says an insurer can cancel a homeowners policy, or suspend some coverages, once a home has been vacant for more than 60 days.¹³

We found no official probate timeline from the states we cover. As our illustration, a sale through a trust, a transfer-on-death deed or survivorship title can take about 2 to 4 months, and a probate sale about 6 to 12 months or more, longer if heirs disagree.

If your parent lived in a different state from the house, you may need a second, smaller probate case where the house is, called ancillary probate.

In several states we cover, including Texas, California and New York, many estate and trust sales are exempt from the state seller-disclosure form, though other disclosure duties can still apply. The federal lead-paint disclosure for pre-1978 homes still applies.