Selling an Inherited House in Sacramento County: What Heirs Need to Know

About a third of the houses we buy are inherited, so I've sat at a lot of kitchen tables with heirs holding a folder of papers they're not sure how to read. This is the plain-English version of what I explain there. It won't replace a probate attorney where you need one, but it should make you dangerous enough to ask good questions.

First question: how is the title held?

Everything downstream depends on this one fact. Pull the deed (or let a title company do it in a day) and you'll be in one of three situations.

The house was in a living trust. Best case. The successor trustee can typically sell without any court involvement, on whatever timeline the trust allows. We've closed trust sales in two weeks flat.

Joint tenancy or community property with right of survivorship. The surviving owner takes title by recording an affidavit of death. No probate for the house. A short recording delay, then it's sellable.

The house was in the decedent's name alone. This is the probate lane. In California, estates above the small-estate threshold (a bit over $200,000 for deaths in recent years, and a house almost always clears it) go through Superior Court — for Sacramento County that's the probate division downtown, and their self-help pages are genuinely useful. Expect the full process to run 9 to 18 months, but here's the part most heirs don't know: you usually don't have to wait for the end to sell.

Selling during probate

Once the court issues letters and the personal representative has authority under the Independent Administration of Estates Act, the house can be sold during administration. Full authority means the PR can sell with notice to heirs and no court hearing; limited authority means the sale needs court confirmation, which adds several weeks and a hearing where the sale can theoretically be overbid. We buy both ways. The paperwork is different; the kitchen-table conversation is the same.

The tax picture is better than heirs fear

Two rules do most of the work here.

Stepped-up basis. For income tax, inherited property's cost basis resets to its fair market value at the date of death. Mom bought the house for $60,000 in 1985; it's worth $450,000 when she passes; your basis is $450,000. Sell it soon after for around that value and the capital gain is roughly zero. This single rule is why "should we sell now or hold?" has a different answer than most heirs assume. The IRS covers it under gifts and inheritances.

Prop 19 reassessment. The property-tax side got harsher in 2021. A child keeping a parent's low assessed value now generally must move into the house as their primary residence, and even then the exclusion is capped. Keep it as a rental or leave it empty and the county reassesses at market value — in Sacramento County that's often a jump from a couple thousand a year to five figures. The County Assessor publishes the details. For heirs who weren't planning to live in the house, Prop 19 quietly removed most of the reason to keep it.

The house itself: don't renovate, don't agonize

The classic heir mistake is spending three months and $30,000 "getting it ready" — new carpet, paint, a dumpster parade — for a house that was always going to sell to someone who'd redo everything anyway. A 1960s house with original systems sells on land and location, not on fresh beige carpet. Get a real as-is number first (ours is free and takes a day), then decide if any prep spending actually moves it. Usually it doesn't.

Same goes for the contents. Estate sale companies take 30 to 40 percent and want the good stuff; junk haulers charge by the truck. Or skip both: we buy houses with everything in them, and I mean everything. Take the photos and the jewelry. We've handled the rest more times than I can count — see the inherited property page for how that works.

Multiple heirs: get the number first, argue second

Three siblings, three opinions, one house. I've watched families burn months debating renovation plans nobody agreed on. The thing that actually breaks the logjam is a concrete written number, because it converts an emotional question ("what do we do with Mom's house") into an arithmetic one ("do we take $X split three ways"). Escrow splits proceeds per the estate's instructions; nobody has to trust anybody with a check.

FAQ

Do we owe federal estate tax?

Almost certainly not — the federal exemption is over $13 million per person. California has no state estate or inheritance tax. For nearly every Sacramento family, the taxes that matter are the property-tax reassessment and (rarely, thanks to stepped-up basis) capital gains.

The house still has Mom's mortgage. Can we sell before it's paid off?

Yes — the loan is paid from proceeds at closing like any sale. Keep making payments meanwhile if the estate can; federal rules let heirs take over communication with the servicer, and the CFPB explains how at consumerfinance.gov.

One heir is living in the house and won't leave. Now what?

That's a legal question above our pay grade, and the honest answer is it needs the estate's attorney. What we can say from experience: a written offer with a real number attached has ended more than one standoff that months of family meetings couldn't.