I Inherited a House — Now What?

Nobody plans for this moment. One day you're dealing with grief, the next you're dealing with a property — and a list of decisions you didn't expect and weren't prepared for.

The internet will give you checklists. Your neighbor will give you opinions. What you actually need is someone who can help you understand the financial and logistical picture before you make decisions that are hard to undo.

At The Cyr Team, we've helped families across Chester County, Delaware County, Montgomery County, and New Castle County navigate inherited home sales for 17+ years. These are the questions we hear most often — usually when someone's already months into the process and realizing they missed something important early on.

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Do I have the legal authority to do anything yet?

This is the question that trips up almost every family, and it needs to be answered first — before you clean out the house, before you call a contractor, before you talk to a real estate agent.

In Pennsylvania, the executor named in the will must obtain Letters Testamentary from the Register of Wills before they can legally act on behalf of the estate. In Delaware, the process is similar. Without those letters, you can't list the property, sign contracts, or authorize repairs.

If there's no will, the court appoints an administrator — and that takes longer.

The timeline varies by county. Chester County processes differently than Delaware County, which processes differently than New Castle County. Your estate attorney handles this, but you need to know where you stand before anything else moves forward.

Is there still a mortgage on the property?

This is the first financial surprise for many families. The mortgage doesn't disappear when the owner passes away. Someone needs to keep making payments — or the lender will eventually begin foreclosure proceedings.

The good news: federal law (the Garn-St. Germain Act) prevents lenders from calling the loan due solely because of the owner's death. You have time to figure out your options — but you need to communicate with the lender early.

Your options: pay off the mortgage from estate funds, continue making payments while you decide what to do, refinance into your own name if you want to keep the property, or sell the home and pay the mortgage from the proceeds.

If the property has a reverse mortgage, the timeline is tighter. Reverse mortgage lenders typically give heirs 6–12 months to pay off the balance or sell. That clock starts ticking at the date of death, not when you find out about it.

What's the property actually worth — and what will I net?

An inherited home's value isn't what Zillow says. It's what a buyer will actually pay, given the property's current condition, the neighborhood market, and the time of year.

Many inherited homes have deferred maintenance — outdated kitchens, aging roofs, cosmetic issues that accumulated over years. That affects value. The question isn't "what's the Zestimate" — it's "what will this property sell for in its current condition, and what would targeted updates add to that number?"

And then there's the cost side: closing costs, transfer taxes, any repairs you decide to make, estate attorney fees, and the mortgage payoff. What you walk away with is always less than the sale price.

Our Market Intelligence Tool can show you what comparable properties have sold for in the neighborhood — that's the starting point for a realistic number.

What's the stepped-up basis and why does it matter right now?

This is the single most important tax concept in an inherited home sale — and the one most families don't learn about until it's too late to fully benefit from it.

When you inherit property, the IRS resets the cost basis to the fair market value at the date of death. Not what your parents paid for it. Not what they put into it. The value on the day they passed.

So if your parents bought for $120,000 in 1985 and the home is worth $475,000 when they pass, your basis is $475,000. If you sell for $480,000, you owe capital gains on just $5,000 — not $360,000.

But here's what most people miss: that advantage erodes with every month you wait. If the property appreciates to $510,000 while you're deciding what to do, your taxable gain is now $35,000. If you hold it for five years and it reaches $575,000, you're looking at $100,000 in gains.

This doesn't mean you should rush to sell. It means you should understand the tax clock that's running and factor it into your decision.

What if there are multiple heirs who disagree?

This is where inherited home sales go sideways. Two siblings who agree on everything still have to coordinate schedules, sign documents, and make joint decisions about pricing, repairs, and offers. Three siblings in different states with different opinions about the property? That's a different level of complexity.

Common conflicts:

• One sibling wants to sell, the other wants to keep it — usually requires a buyout at appraised value
• One sibling is living in the property — rent-free occupancy creates resentment and complicates the sale
• Siblings disagree on pricing — objective market data usually resolves this faster than opinions
• One sibling isn't responsive — legal intervention may be needed if they won't cooperate

We've worked with families in every version of this situation. The pattern is consistent: transparent data and clear communication resolve most conflicts. When both sides see the same numbers, the emotional arguments lose their grip.

Should I sell the inherited house or keep it as a rental?

This sounds like a simple financial comparison. It's not.

Selling gives you a clean exit: cash in hand, no ongoing obligations, and the stepped-up basis tax advantage if you sell relatively quickly.

Renting generates monthly income — but it also means becoming a landlord (or paying a property manager), handling maintenance on what's likely an older home, carrying insurance and property taxes, and dealing with vacancy risk.

And here's the tax trap: once you convert the property to a rental, the stepped-up basis still applies when you eventually sell — but the property will have appreciated beyond that basis, and you may owe depreciation recapture on top of capital gains. The tax picture gets significantly more complicated.

We can model both scenarios — the net proceeds from selling now versus the projected rental income and eventual sale — so you're making a financial decision, not an emotional one.

What about selling to a family member?

It seems simple — keep the house in the family at a fair price. But the IRS watches these transactions closely.

If you sell significantly below fair market value, the difference between the sale price and the appraised value may be treated as a gift. That could trigger gift tax reporting requirements and eat into your lifetime gift tax exclusion.

You'll want a formal appraisal, a proper purchase agreement, and coordination between your estate attorney and the buyer's lender (if they're financing). "We'll just handle it between us" is how family real estate transactions turn into family disputes.

You don't need a checklist — you need a plan

Inheriting a home isn't a windfall. It's a project — with legal requirements, tax implications, family dynamics, and financial decisions that interact with each other in ways that aren't obvious until you're in the middle of it.

The families who navigate it well are the ones who get the facts early, ask the right questions, and work with people who've been through it before.

Vincent Cyr (SRES designated) and Jane Cyr have helped families across Chester County, Delaware County, Montgomery County PA, and New Castle County DE sell inherited homes for 17+ years and 400+ transactions — including out-of-state families managing everything remotely. We coordinate with estate attorneys, handle local logistics, and give you honest numbers so you can make informed decisions.

Related Resources

• Estate Sale & Inherited Home Services — Our approach to helping executors and heirs
• Market Intelligence Tool — Search neighborhood appreciation and sales data
• Inherited Home Podcast — Full Transcript — Deep dive on probate, taxes, and the traps families miss
• What Most Downsizing Checklists Won't Tell You — Similar framework for downsizers
• Frequently Asked Questions