How to Sell an Inherited Property: A Step-by-Step Guide

The process of selling an inherited property differs substantially from a typical real estate transaction. Multiple heirs may have a say in what happens to the property, courts may need to be involved in the process, and there are important tax considerations to keep in mind.

Below, we’ll break down how to sell an inherited property, from identifying inheritors to closing on the sale. We’ll also offer tips on how to save yourself time and hassle during the sale, including whether to sell to a cash buyer or through a real estate agent.

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1. Determine if you have the legal right to sell

Before you can sell an inherited home, you first need to check that you have the legal right to do so. This step is not always as obvious as it may seem. Doing your due diligence early on will help prevent legal issues from arising later.

Find out how you inherited the home

A will or trust should clearly outline who inherits the property. If the house was transferred through probate proceedings, you’ll need a copy of the court order awarding the property to you. Gather whatever paperwork helps establish the process that made you the inheritor of the property.

If the deceased didn’t leave behind a will, the probate court will usually be responsible for determining who inherits the house based on intestate succession laws. Many states prioritize next of kin (spouses and children), but the specific order of inheritance varies by state.

Identify all heirs or co-owners

An inherited property may have multiple parties with a legal entitlement to it. If you are the executor of the will, you may need to get all interested parties to agree to a sale. The will may provide guidance about whether or not the inheritors all need to agree on what to do with the property.

Contact everyone with a stake in the property to confirm that they’re willing to sell. To be safe, you should get their agreements in writing.

Mitch Mitchell, an estate planning attorney at Trust & Will, says: “If there are multiple people, and it's not practical for them all to own that property, then the document, either the will or trust, can specify, ‘I want my fiduciary, my personal representative, executor, or trustee to sell the property and distribute the balance that's left over.’”

However, Mitchell also points out that a will “can also just say, I want everything to go to my children equally, and they'll have to figure it out.”

Check property records for ownership details

Your county recorder’s office or property assessor’s website will be able to verify whose name is on the deed or title. This information is useful for checking if any liens, mortgages, or other issues may delay or prevent a sale. Checking that the title is clear early on helps avoid issues with the transaction later on.

Consult a probate attorney if unsure

A probate attorney can review your situation, explain applicable state laws, and help you avoid potential legal issues. Consulting a probate attorney early on can help avoid delays, stress, and costly mistakes later on.

2. Go through the probate process (if necessary)

Probate is often (but not always) required.

Determine if probate is necessary

Probate means assets can only be transferred to heirs with court supervision. Many assets don’t require probate, such as property held in joint tenancy with right of survivorship, assets held in a living trust, and property that has designated beneficiaries.[1]

In many states, small estates can benefit from a streamlined probate process. Likewise, surviving spouses can also often inherit property via a streamlined probate process.

Petition for probate in the right court

If the deceased person left behind a will, you’ll need to file it and petition the appropriate court to start probate. This court is usually the one where the deceased person last lived.

The court will then appoint an executor, who is usually named in the will and may also be one of the inheritors. If there’s no will, the court will appoint an administrator to manage the distribution of assets.

Complete court-required steps

Specific steps will vary by state, size, and complexity of the estate, but they commonly include:

• Notifying all heirs and creditors (typically via email or published notices)
• Appraising the property's value
• Paying outstanding debts and taxes from the estate (note that the order by which creditors must get paid varies by state)

Request court approval to sell (if needed)

In some states, you may need to petition the court for approval to sell the inherited property. This approval is needed to ensure that all beneficiaries have consented to the sale and that the property is being sold for fair market value.

3. Decide whether to keep or sell the property

Once you’ve established ownership of the property, you’ll need to decide whether to keep or sell it. Sometimes this decision will be made for you by the details of the will. If not, you and the other beneficiaries will have to decide.

Assess your needs and goals

If you need liquid cash, then selling the house sooner probably makes the most sense. However, depending on the property’s location and the local market, you may be able to rent it out to generate income in the medium or long term — if you have the time to manage a property as a landlord.

If immediate cash isn't the goal, or if the home has sentimental value, you could hold onto the property and keep it in your family, for example, as a vacation home. You'll have to cover all the associated carrying costs, though.

If multiple people have a stake in the home, then you’ll need to assess their goals, too, as well as how quickly they may want to move ahead with a sale. While it may be tempting to focus on just the financial side of whether to sell or keep the house, the emotional side is also important.

Calculate the costs of keeping the home

If you decide to keep the property, you’ll need to work out whether you have enough money to cover the ongoing expenses of homeownership.

• Mortgage payments: If there’s already a mortgage on the property, you’ll need to continue making those payments or pay it off.
• Property taxes: These will need to be paid regardless of whether or not you occupy the property. Depending on location and the home’s value, they can be a substantial expense.
• Insurance premiums: You’ll need homeowner’s insurance for the property. If you don’t plan on using the property as your primary residence, expect to pay higher premiums.
• Utilities and maintenance: Regular repairs and maintenance, as well as utilities, will require an ongoing investment. Issues with the property may also be uncovered that could require a more substantial one-time repair investment.

Estimate the home’s current market value

Contact a local real estate agent in order to get a comparative market analysis (CMA). A CMA is a report that will give you an estimate of your home’s market value based on what similar properties nearby have sold for recently. A realtor can provide a CMA to you for free, and it’s a good way to determine whether or not selling makes financial sense.

Review tax implications

Selling an inherited property holds tax considerations that differ substantially from a simple sale of your primary residence.

Unlike a property that is gifted or sold, the cost basis of an inherited property is usually “stepped up” to the property’s fair market value when its owner dies. Because of this step-up basis, you may owe little or no capital gains tax if you sell soon after inheriting the property. However, while you may owe less in tax if you sell quickly, sometimes it’s better to wait for good market conditions.

For example, Travis Christiansen, an estate planning attorney with Boyack Christiansen Legal Solutions, says:

“Sometimes, waiting is better if you can. Because if you can sell at $100,000 but you wait 60 days and you sell at $150,000, even though you might pay a 20% capital gain tax, that's still an extra $40,000 [of profit].”

Tax implications for inherited properties can get complicated. If you’re unsure of your tax obligations, you should consult a certified public accountant, especially if you’re planning on keeping the property as an investment or for large estates that could trigger estate taxes.

4. Choose how to sell the inherited property

If you’ve decided against keeping the property, your two main options are to sell directly to a cash buyer or to list it on the market with a real estate agent.

Option 1: Sell directly to a cash buyer

Selling to a cash buyer — such as a “we buy houses” company, an iBuyer, or a local investor — is your fastest option. Many cash buyers will purchase homes in any condition without tours or showings, so you can close often within a few weeks. And because there’s no financing contingency, there’s less risk of the deal falling through.

However, selling to a cash buyer means you’ll sell for less than what you would likely get on the open market with a realtor. Plus, you’ll have limited room to negotiate with cash buyers.

How it works

The process of selling to a cash buyer varies depending on the type of cash buyer you’re selling to (e.g, an iBuyer versus a local investor). However, the process usually looks like this:

1. Contact the cash buyer, usually by phone or filling out an online form, and schedule an in-person or virtual visit of the property.
2. A representative for the company will assess your property, usually in person, to determine its fair market value.
3. Receive your cash offer, usually on the same day as the assessment. You’re under no obligation to accept the offer right away, and you should take time to review it.
4. If you accept the offer, the buyer will handle most of the paperwork and closing process for you.

Note that if you’re selling to an iBuyer, you’ll receive an initial offer followed by a final offer. The final offer may be lower to account for repairs.

Option 2: List with a real estate agent

Working with a real estate agent gives you access to a larger pool of potential buyers, which often results in a higher sale price. However, listing on the open market can take longer than selling to a cash buyer and is a more involved process, which may be inconvenient when selling an inherited property.

How it works

While selling with a realtor may take longer than selling to a cash buyer, the process is not overly complicated. Fortunately, your real estate agent will be there every step of the way to guide you.

1. Find a realtor: Compare multiple realtors and choose the one who best aligns with your goals.
2. Prepare the property: Clean and carry out any necessary repairs to get the property ready for viewings. Your realtor will advise you on the most important maintenance issues to tackle.
3. List on the MLS: Work with your realtor to set a listing price and get your property on the local MLS, where it will be visible to buyer agents and syndicated to major real estate websites.
4. Showings and tours: Your realtor will handle showings and tours of the property, so there is no need for you to be present.
5. Negotiate with buyers: Your realtor will present any offers to you and advise you on how to proceed. They’ll present any counteroffers on your behalf.
6. Prepare for inspection: Most offers will be contingent on an inspection and appraisal. Again, you don’t need to be present for these steps.
7. Proceed to closing: Your realtor will assist with the paperwork and closing. Closing costs, including realtor commission, will be deducted from the proceeds of the sale.

5. Prepare the home for sale

Whether you sell to a cash buyer or through a realtor, you’ll likely need to do at least some work to prepare the home. Here are some key things to check off your list before selling.

Secure the property

It’s possible that the deceased made copies of the house keys, which can be hard to track down. To ensure the property is secure, you should change all of the locks. You may also want to install a security system, especially if the property will be vacant for an extended period of time.

Clear out personal belongings

Sort through all items in the home and create separate piles for what you’d like to keep, donate, sell, and throw away. This can be an emotionally difficult process, so be sure to give yourself time and consider involving friends or other family members for support.

If time is limited or there is a large estate to sort through, you may want to hire an estate clean-out service. These services will sort and remove all items and will often offer to purchase valuable items from you while discarding the rest.

Decide on repairs or selling as-is

Consider your timeline, market, and personal financial situation. Making repairs will increase your home’s value and help it appeal to a larger pool of buyers, which can lead to a higher sale price.

Stephen Michalakos, a real estate advisor at Engel & Völkers St. Pete, says, “In cases when the inheritors are open to the renovations, I'll recommend that they pull equity or take a small improvement loan to hire a contractor. Those of my clients who have run with this advice have in certain cases doubled their inheritance proceeds.”

However, Michalakos concedes that many inheritors don’t have the time or money to invest in extensive repairs and instead opt for more cosmetic fixes.

Selling as-is requires less up-front investment of cash and time, though you’ll be limiting the number of interested buyers, so your sale price will suffer. Selling as-is isn’t usually an issue when selling to a cash buyer, but it can scare off traditional buyers, especially if the property needs significant work.

Complete maintenance and repairs

If you decide to repair the property, consult with a realtor about which repairs will deliver the most return on investment.

Some repairs can end up costing more than any potential returns. For example, safety issues — such as a leaky roof or faulty electrical system — should be addressed, as few buyers will consider purchasing a property with them.

However, more luxury or highly personalized upgrades aren’t likely to be worth the investment as they don’t address fundamental issues with the property. These upgrades may also not align with buyer tastes, which means you could miss out on offers.

6. Plan for taxes

Taxes are a major consideration when selling an inherited property, and they differ substantially from the tax obligations associated with selling a primary residence. Here are a few tax considerations to keep in mind.

Capital gains tax

You’ll usually have to pay capital gains tax on the profit you make when selling an asset. The amount you owe in capital gains tax depends on how long you’ve owned the property for and your income level. In general, capital gains taxes are lower if you’ve held the property for more than a year and range 0-20%, on top of state taxes.[2]

Stepped-up basis

If you’ve inherited a property, it's typically treated as though it were a long-term asset, even if you’ve held it for less than a year.

This is called a stepped-up basis, where the IRS lets you calculate capital gains taxes based on the value at the time of the owner’s death — not when the property was originally purchased. So if you sell quickly, your capital gains tax obligations will likely be very low, or even zero.

For example, let's say you inherited a $500,000 property in 2025 that was bought for $200,000 in 1995. If you sell the property for $520,000, you’ll owe capital gains tax on only the $20,000 profit you made — not the $320,000 increase in home value.

Inheritance tax

Inheritance taxes are only levied by Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.[3] The rates vary by state but are usually 1–20%. Spouses are usually exempt, and children of the deceased often pay lower rates.

Estate tax

The federal estate tax exemption is $13,990,000 per person for the 2025 tax year, meaning most estates are exempt.[4]

A handful of states charge their own estate taxes with lower exemptions: Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington State. [3]

Estate tax is deducted from the estate’s assets — you don’t have to pay it directly.

Consult a tax professional

Taxes can get complicated fast when selling an inherited property. To minimize your liability and avoid unwanted surprises later on, you should consult a CPA or a tax attorney. They can provide you with expert guidance on how to time your sale and how to take advantage of exemptions and deductions to lower your final tax bill.

7. Prepare the paperwork

Here are some of the documents that you’ll typically need to gather:

• Death certificate: an official document confirming the previous owner’s death.
• Will or trust: documents showing how you inherited the property.
• Probate court orders: court documents that prove you have the authority to sell the property.
• Deed to the property: an official document proving your legal ownership of the property.
• Tax records: documents showing property tax assessments and payment obligations.
• Insurance policies: documents showing current homeowners insurance coverage.
• Mortgage documents: details of any existing home loans and payment amounts.
• Inspection reports: previous inspection reports, if available.
• Utility bills: recent bills showing payment amounts and account status.
• HOA documents: homeowners association rules and fees, if applicable.

8. Close the sale and distribute the proceeds

The final steps of selling an inherited property focus on closing the sale and distributing the funds.

Review the closing statement

You’ll need to review either the HUD-1 settlement statement or the Closing Disclosure. This document will include the sale price, closing costs (including realtor commissions, transfer taxes, and title insurance), and the net proceeds of the sale.

Sign the final documents

During closing, you’ll sign the deed, which will transfer ownership of the property over to the buyer. The buyer will provide funds for the purchase via a cashier’s check or wire transfer, and you’ll receive the proceeds after closing costs are deducted.

Pay estate debts and distribute remaining funds

Once you’ve received the proceeds from the sale, you’ll need to pay off any remaining estate debts according to probate court instructions. Once the debts have been paid off, you’ll distribute the funds in accordance with the will or state law.

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