How to Sell Land You Inherited From a Family Member

Step 1: Confirm Legal Ownership

Before you can sell inherited land, you need clear legal authority to do so. This typically means one of two things:

• Probate has been completed: The court has issued an order distributing the property to you, and a new deed has been recorded in your name at the county recorder's office.
• Transfer-on-death deed: Some states allow property to pass outside of probate through a TOD deed (also called a beneficiary deed). If the decedent filed one, you may only need to file a death certificate and affidavit to claim title (Uniform Real Property Transfer on Death Act).

If neither has happened, you'll need to open a probate case or a small estate proceeding. Most states set a small estate threshold — the exact amount varies by jurisdiction, so check your state's probate code or consult the local clerk of court (American Bar Association, Probate Resources).

Step 2: Understand the Tax Implications

A key tax benefit for inherited property is the stepped-up basis under IRC §1014 (IRS Publication 551). Here is how it works:

• Your tax basis in the property resets to the assessed value at the date of death, not what the original owner paid.
• This means that appreciation during the prior owner's lifetime is not taxed when you sell. Only the gain (if any) between the date-of-death value and your sale amount is subject to federal capital gains tax.
• Selling shortly after inheritance is particularly tax-efficient because the property has had minimal time to appreciate beyond the stepped-up basis.

Step 3: Research the Property

Inherited land may not have been assessed recently. To understand the property's standing:

1. Check county property appraiser records for the current assessed value. Note that county assessments are for tax purposes and may not reflect the full range of factors a buyer considers.
2. Look at comparable sales — recent sales of similar parcels in the same county and area. Your county property appraiser website often lists recent arm's-length transactions.
3. Order a professional assessment if the property is high-value or unusual (waterfront, agricultural, commercial-zoned). This is often required by lenders when the buyer uses financing.

For typical vacant residential lots, county records and comparable sales data provide a reasonable starting point.

Step 4: Resolve Any Outstanding Issues

Common issues with inherited land:

• Multiple heirs: If the property was left to more than one person, all owners must agree to sell (or one can petition the court for a partition sale under their state's Uniform Partition of Heirs Property Act).
• Back taxes: Any unpaid property taxes become the heir's responsibility and must be cleared at closing.
• Title defects: Old liens, unrecorded interests, or breaks in the chain of title from prior generations may need to be resolved.
• Access issues: Landlocked parcels or properties without deeded road access require easement negotiations.

Step 5: Choose How to Sell

You have three primary options:

1. List with a real estate agent: Provides maximum market exposure but involves agent commissions and typically several months on the market for vacant land (National Association of Realtors, Land Market Survey).
2. Sell directly to a land buyer: Companies like SimplySellLand purchase land as-is, handle title issues, and close in as little as two to four weeks. The trade-off is a faster, simpler process in exchange for potentially lower net proceeds. This is particularly useful for out-of-state heirs managing a property remotely.
3. Sell by owner (FSBO): Saves commission costs but requires you to handle marketing, buyer qualification, contracts, and closing coordination.

Choosing What Works for You

The best approach depends on your timeline, the property's condition, and your comfort with the sales process. Many heirs choose a direct sale because the property is emotionally complex, physically distant, and generating ongoing tax liability with no income. Whatever you choose, understanding these five steps gives you a clear path forward.