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Inheriting a house: what to do

Getting an inheritance can be an exciting time, but it can also be confusing or even overwhelming if you inherit assets—especially a house. What do you do with an inherited house? How do you go about selling it? It could be tough to know where to begin. 

What to do if you inherit a house?

If there’s an existing mortgage, the first thing to do is to contact the lender to ensure that payments are up-to-date and that ongoing payments can be made. After that, there are a few different things that can happen depending on the situation.1 
  • In some cases, the executor of the estate, or person appointed by the probate court to fulfill the will’s terms, may need to sell the house to pay creditors. 
  • The Consumer Financial Protection Bureau (CFPB) states the person who inherited the title of the home must be a relative of the deceased, a spouse, or joint tenant, and CFPB requires lenders to treat them as the original borrower. You'll most likely need to provide documentation to the lender proving your inheritance, but then they should be able to assist with your request.
  • As an inheritor of the home, it’s not legally yours until the title is in your name. Once the home is in your name, you may want to take over the existing mortgage and pay the mortgage, refinance, convert the home equity into cash, or do a cash-out refinance. Moving into the home or renting it are also options. 
  • Not all, but many loans have a “due-on-sale” clause—a protection for lenders that requires the full balance of the mortgage to be paid in full before the property is resold. 

How to sell an inherited house

Selling a home you inherited may require home renovations such as painting, small repairs, and a deep clean. Having a home inspection conducted will identify potential issues. 
Transferring real estate can be complicated and subject to many specific regulations, which vary from state to state. Consider these tips before you get started. 
Get an appraisal 
An appraisal can determine the value of the property and ensure the home and land are valued fairly. 
Hire a real estate agent 
Real estate agents can help set a realistic listing price based on their experience and comparable homes in the area. They may also help refer you to other local professionals—photographers, attorneys, and inspectors. 
Hire a real estate attorney 
When selling inherited property, an attorney may be helpful if complications arise, for example, liens against the home you didn’t know about or other errors. In some states, an attorney is required at closing. 
Prepare for closing costs 
Home sellers, as opposed to buyers, usually pay the commission of the real estate agents. It’s usually 6% of the sales price, split between the seller’s and buyer’s agent. As a negotiating point, consider offering to pay some or all closing costs. Closing costs can include a title search and title insurance, home inspections, and fees associated with a mortgage.2
Keep in mind, you can often use some of the proceeds from selling your home to cover your closing costs, so you won’t necessarily have to pay for them out-of-pocket. 
Consider capital gains tax implications 
When you inherit property, you get a step-up in cost basis, and the IRS will assess the value of the house at the time you inherited it. If you then sell the house for an amount that’s greater than the value the IRS assigned to it, you’ll owe capital gains taxes on the difference. 

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1. Mia Taylor, “What happens if you inherit a house with a mortgage?,” Bankrate, February 23, 2023, 2. Michele Lerner, "Closing Costs for Sellers: Common Fees Associated With Selling Your Home,"®, August 7, 2022,

This information is general in nature and provided for educational purposes only.

Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.