8 Common Mistakes When Inheriting a Maryland Home (And How to Avoid Them)

Inheriting a home is rarely straightforward. Beyond the emotional weight of losing a loved one, there are legal, financial, and family decisions that unfold over months — and the wrong move at the wrong time can cost the estate tens of thousands of dollars.

Here are the eight most common mistakes people make when inheriting a Maryland home, and how to avoid each one.

Mistake #1: Not Getting a Date-of-Death Appraisal

This is the single most expensive mistake heirs make.

When you inherit a home, the property's cost basis "steps up" to its fair market value on the date of death. This means if you sell the home shortly after inheriting it, you'll likely owe little or no capital gains tax.

But you need to document that value. Without a date-of-death appraisal, you can't prove what the home was worth when the owner died — and the IRS may assess capital gains based on the original purchase price, not the current value.

Example:

Your mother bought her Silver Spring home in 1985 for $120,000. When she passes away in 2026, it's worth $850,000. Your cost basis becomes $850,000.

If you sell it 6 months later for $870,000, your taxable gain is $20,000 — not $750,000.

Without the appraisal, you might owe capital gains on the full $750,000 of appreciation during your mother's lifetime. At a combined federal and Maryland rate of roughly 20%, that's potentially $150,000 in unnecessary taxes.

Get the appraisal within the first 90 days. A licensed appraiser charges $400 to $800. It's the best money the estate will spend.

Mistake #2: Rushing to List the Property for Sale

Grief creates urgency. Family pressure creates urgency. Mortgage payments create urgency.

But listing a home before you understand the probate process, the property's condition, and the estate's financial picture is a recipe for mistakes.

Here's what happens when you rush:

• You list before you have legal authority to sell (the sale can't close)
• You price the home based on emotion, not data
• You skip repairs that would have paid for themselves
• You accept an offer that's lower than the property's true value
• You forget about disclosure requirements

The first 30 days after a death are for securing the property, notifying insurance, gathering documents, and opening probate — not for listing the home.

Take a breath. Get your bearings. Then make a plan.

Mistake #3: Letting the Property Sit Vacant Without Insurance Review

When the owner dies, the homeowner's insurance policy doesn't automatically continue covering the property the way it did before.

Many policies have vacancy clauses. If the home is unoccupied for 30, 60, or 90 days (depending on the policy), coverage may be reduced or eliminated entirely.

If a pipe bursts, a tree falls, or someone breaks into a vacant home and the insurance won't cover it, the estate absorbs the loss.

Call the insurance company immediately after the death. Ask:

• Does the policy continue after the owner's death?
• Are there vacancy limitations?
• Do I need a vacant property endorsement?
• What's the coverage for liability if someone is injured on the property?

This is a 15-minute phone call that can save the estate thousands.

Mistake #4: Cleaning Out the House Too Fast

After decades in a home, there can be a lot of belongings. The impulse to clean everything out quickly is understandable.

But rushing the cleanout can cost the estate money.

Items that may have value:

• Antiques and vintage furniture
• Artwork and collectibles
• Jewelry and watches
• Coin collections, stamp collections
• Vintage tools and equipment
• Original artwork or signed items
• Wine collections
• Musical instruments

Before throwing anything away or donating everything, consider having an estate sale company or auction house do a walkthrough. They can identify items of value that you might overlook.

The cleanout should happen after you've had the property appraised and before you list it for sale — not before you've even opened probate.

Mistake #5: Over-Renovating Before Selling

This is one of the most common financial mistakes in probate real estate.

Heirs often assume they need to renovate the kitchen, update bathrooms, install new flooring, and replace everything before listing. Sometimes that investment pays off. Often it doesn't.

The math is simple:

• If you spend $50,000 on renovations and the home sells for $50,000 more than it would have sold as-is, you broke even (and spent months waiting)
• If you spend $50,000 on renovations and the home sells for $20,000 more than it would have sold as-is, you lost $30,000
• If you spend $50,000 on renovations and the home sells for the same price, you lost $50,000

Before spending any money on repairs, get two numbers:

1. What is the home worth in its current condition?
2. What could it sell for after selected improvements?

If the difference doesn't justify the cost and time, sell as-is.

Mistake #6: Ignoring Outstanding Debts and Liens

The inherited home may have debts attached to it that you don't know about.

Check for:

• Existing mortgage or HELOC
• Property tax arrears (Maryland counties can place a lien for unpaid taxes)
• HOA or condo dues (past-due amounts become liens)
• Federal tax liens
• Mechanics liens from unpaid contractor work
• judgments against the deceased owner

A title search will reveal most of these. Your probate attorney or title company can help.

Don't assume the mortgage disappears when the owner dies. It doesn't. The loan follows the property. If the estate doesn't have cash to cover the mortgage, the property may need to be sold to pay it off.

Mistake #7: Not Understanding Maryland's Disclosure Requirements

Maryland requires sellers of residential property to provide buyers with either a Disclosure Statement or a Disclaimer Statement before the sale is final.

This applies to probate sales too.

The Disclosure Statement requires you to answer questions about known defects and conditions. The Disclaimer Statement (as-is) states you're selling without representations about the property's condition.

Even with a Disclaimer Statement, you must still disclose latent defects — hidden problems that pose a health or safety risk and wouldn't be discovered through a visual inspection.

As a Personal Representative who may never have lived in the home, you may not know the property's condition. That's okay. Maryland law bases disclosure on what you know, not what you should have investigated.

But be honest about what you don't know, and consult your probate attorney about which form to use.

Mistake #8: Letting Family Disagreements Derail the Process

Disagreements among heirs are the leading cause of delay in probate sales.

One heir wants to sell quickly. Another wants to keep the home. A third wants to renovate before listing. A fourth lives 500 miles away and has opinions about everything.

The problem isn't that families disagree. The problem is that disagreements go unresolved for months while the estate pays taxes, insurance, utilities, and maintenance on a property that isn't moving.

If the family can't agree:

1. Get the facts first — what is the home worth, what does it cost to hold, what are the selling options?
2. Consider a buyout — the heir who wants to keep the home can buy out the others at fair market value
3. Consult a probate attorney — if the disagreement can't be resolved, a partition action may be necessary (but it's slow and expensive)
4. Remember the stakes — a 2% difference in sale price isn't worth a permanent family rift

The goal isn't perfection. It's progress.

What to Do Instead

If you've inherited a home in Maryland, here's the order that works best:

1. Pause for 30 days — secure the property, notify insurance, gather documents
2. Open probate — file the will with the Register of Wills
3. Get a date-of-death appraisal — within 90 days
4. Check for debts and liens — title search, mortgage verification, tax status
5. Understand your tax obligations — inheritance tax, capital gains, stepped-up basis
6. Decide sell, rent, or keep — with clear numbers, not emotions
7. Resolve family disagreements early — with an attorney if needed
8. Execute the sale carefully — proper pricing, proper disclosure, proper timing

The right order of operations saves time, money, and family relationships.

Inherited a Home in Maryland? Let's Talk.

If you're dealing with an inherited property and need help understanding your options, I'm happy to discuss the real estate side of the decision.

There is no obligation.

We can look at the property's current value, its potential market value, and the estimated net to the estate after costs and taxes.

Schedule a no-obligation call

Frequently Asked Questions

Do I have to pay capital gains tax if I sell my inherited home right away?

Thanks to the stepped-up basis rule, if you sell shortly after inheriting for roughly its appraised value at the time of death, you'll likely owe little to no capital gains tax. You only pay tax on appreciation after the date of death.

How long do I have to get a date-of-death appraisal?

There's no strict deadline, but get it within 90 days. The sooner you have it, the better documentation you have for the IRS and for the estate's records.

Can I sell a house in probate before the process is finished?

You can list the home and accept an offer once you have Letters of Administration or Letters Testamentary. But the sale generally can't close until the estate has legal authority to transfer title.

What if I don't know the property's condition?

Maryland law bases disclosure on what you know, not what you should have investigated. If you genuinely don't know about a defect, you're not required to disclose it. But be honest about what you don't know.

Should I renovate before selling?

Not automatically. Get two numbers first: what the home is worth as-is, and what it could sell for after improvements. If the difference doesn't justify the cost, sell as-is.

What happens if my siblings and I disagree about selling?

Start with the facts — what is the home worth, what does it cost to hold, what are the options? If the family can't agree, consult a probate attorney about buyout options or other resolution strategies.

Related Resources

• Will I Owe Taxes When I Inherit or Sell a House in Maryland?
• Maryland Estate Tax vs. Inheritance Tax: What Heirs Need to Know
• Maryland Property Disclosure Requirements: What Personal Representatives Need to Know
• Selling a Probate House: Complete Guide
• Probate Sales in Montgomery County, Maryland
• Probate Cost Calculator
• Contact Marc Cormier for a Consultation