Selling Inherited Property in Pennsylvania

When someone dies and leaves you a house, the legal and tax questions start immediately. Can you sell it right away? Do you need probate first? How are you taxed on the sale?

You Almost Always Need Probate First

Legal title to a decedent's real estate does not wait for probate. Under 20 Pa.C.S. § 301(b), it passes at death to the heirs or devisees, subject to the powers granted to the personal representative and to all orders of the court. The heirs hold title and can sign a deed. What they cannot deliver is an insurable title, because a later sale by the personal representative can divest a deed the heirs signed. That is why a buyer's title insurer wants Letters Testamentary (if there is a will) or Letters of Administration (if there is not). These are issued by the Register of Wills in the county where the decedent lived.

As a practical matter, that makes probate the first step in almost every sale. A title company will ordinarily not insure a sale out of a decedent's estate without Letters and a death certificate, and the buyer's lender will want the same. There is a narrow statutory exception for an old estate. Under 20 Pa.C.S. § 3357(a), a deed taken in good faith and for value from the heirs, and recorded, is protected from divestment if no Letters were ever issued and more than a year has passed since the death. That protection does not reach a gift deed or a transfer for no consideration. Some title underwriters will insure on that basis. Ask before you count on it.

The Executor's Authority to Sell

Under 20 Pa.C.S. § 3351, and except as otherwise provided by the will, a personal representative (executor or administrator) may sell any real property that the will does not specifically devise. Specifically devised real property is a different matter:

Will gives general power of sale: Most well-drafted wills grant the executor power to sell any estate property. This is the simplest scenario, the executor can list the property and sell it without court approval.

Will specifically devises the property to someone: If the will says "I leave my house at 123 Main Street to my daughter," the executor may still need to sell if the estate lacks liquid assets to pay debts, taxes, or expenses. Section 3351 reaches specifically devised real property only with the joinder of the specific devisee, which means that beneficiary signs the deed. Unless the will itself gives the executor power to sell specifically devised property, the executor needs that joinder or an order of the Orphans' Court under 20 Pa.C.S. § 3353. The court may enter that order where it finds the sale desirable for the proper administration and distribution of the estate.

No will (intestacy): The administrator has statutory authority to sell under § 3351, but selling specifically to pay debts or expenses is the safer course.

Step-by-Step Process

1. Open the estate. File the will (if any) and petition for Letters at the Register of Wills. In Bucks County, this can often be done in a single visit. You will also need short certificates; certified copies of the Letters that title companies and buyers will need. See our probate process guide for details.

2. Get the property appraised. You will need an appraisal for two purposes: the date-of-death value for inheritance tax, and the current market value for listing. If you sell soon after death, these may be nearly identical.

3. Address any title issues. Run a title search. Common problems include unreleased mortgages from prior transactions, old liens or judgments, tax delinquencies, or estate title defects (missing heirs, prior estates never properly administered). These must be resolved before closing.

4. List and sell. The executor acts as seller. The deed from the estate will typically be an executor's deed or administrator's deed. The title company will require the Letters, death certificate, and short certificates at closing.

5. File the inheritance tax return. The REV-1500 is due within 9 months of death. The property is reported at its date-of-death value, not the sale price. If you pay within 3 months, you receive a 5% discount on the tax owed.

Tax Implications

Pennsylvania Inheritance Tax

Inheritance tax is owed on the date-of-death fair market value of the property, regardless of whether you sell it. The rates depend on the heir's relationship to the decedent:

Two narrow exceptions drop the 4.5% lineal rate to 0%. A transfer from a natural parent, adoptive parent, or stepparent to a child age 21 or younger is taxed at 0% where the parent died after December 31, 2019. A transfer from a child age 21 or younger to such a parent is also 0%. 72 P.S. § 9116(a)(1.2), (a)(1.4). A transfer from a grandparent to a minor grandchild still carries the 4.5% rate.

See our complete PA inheritance tax guide for details on exemptions, deductions, and filing.

Federal Capital Gains Tax

This is where the stepped-up basis rule (IRC § 1014) helps enormously. When you inherit property, your tax basis is the fair market value at the date of death, not what the decedent originally paid for it.

If you sell shortly after death, the gain is often minimal. Long-term capital gains rates apply automatically regardless of how long you have owned the inherited property.

Realty Transfer Tax

When the property is sold to a buyer, the standard Pennsylvania realty transfer tax applies. 1% state plus 1% local (Bucks County), for a total of 2% of the sale price, typically split between buyer and seller.

However, if the property is transferred from the estate directly to a beneficiary (rather than sold to a third party), the transfer is exempt from transfer tax under 72 P.S. § 8102-C.3. The beneficiary can then sell in their own name, but that subsequent sale to a buyer is taxable.

When Multiple Heirs Inherit and Disagree

This is one of the most common problems I see. Three siblings inherit a house. One wants to keep it, one wants to sell, one does not respond. Options include:

Negotiate a buyout. The sibling who wants to keep the house can buy out the others at fair market value.

Family settlement agreement. All heirs sign a binding agreement on how to handle the property. This is enforceable in Orphans' Court. See our family settlement agreements guide.

Partition action. If negotiation fails, any co-owner can file a partition action under Pa.R.C.P. 1551 to 1574 to force a sale or physical division. See our partition actions guide.

What If There Is a Mortgage?

If the decedent had a mortgage, it does not disappear at death. The estate is responsible for payments until the property is sold or transferred. At closing, the mortgage is paid from the sale proceeds before any distribution to heirs.

If the property is underwater (mortgage exceeds value), the estate may need to negotiate a short sale with the lender or allow foreclosure. Heirs are generally not personally liable for the mortgage unless they co-signed or assumed it.

Typical Timeline

From death to a closable sale, expect roughly 3 to 6 months at minimum. The biggest variables are how quickly Letters are obtained (usually 1 to 3 weeks), whether title issues exist (can add weeks to months), and how long the property takes to sell on the market.

The property can be sold while the estate is still open, the proceeds simply become estate assets, distributed according to the will or intestacy statute after debts and taxes are paid.

Legal and factual content on this page was last verified: Aug. 2026. If you are reading this significantly after that date, confirm key provisions with current statute text or contact our office.