How to Sell an Inherited House in Colorado (2026 Guide)
Last updated: January 10, 2026 · 10 min read
Inheriting a house in Colorado comes with important decisions. Whether you're dealing with probate, coordinating with siblings, or simply trying to understand your options, this guide walks you through everything you need to know about selling inherited property in Colorado.
Key Takeaways
- Most inherited properties in Colorado require probate before sale
- You can sell during probate with proper authorization
- Inherited property receives a stepped-up tax basis
- Direct buyers can purchase as-is, skipping repairs and showings
- Colorado has no state inheritance tax
Understanding Property Inheritance in Colorado
When someone passes away in Colorado, their property typically transfers to heirs through one of several mechanisms:
- Will: If the deceased had a will, it specifies who inherits the property
- Intestate succession: Without a will, Colorado law determines inheritance based on family relationships
- Trust: Property held in a living trust passes directly to beneficiaries without probate
- Joint tenancy: Property owned as joint tenants with right of survivorship passes automatically to the surviving owner
- Transfer-on-death deed: Colorado allows beneficiary deeds that transfer property upon death
Understanding how you inherited the property is the first step in determining what you need to do to sell it.
Colorado Probate Basics
Probate is the legal process of validating a will and transferring assets to heirs. In Colorado, most inherited real estate requires probate unless it was held in a trust or had a transfer-on-death deed.
Types of Probate in Colorado
- Informal probate: The most common type for straightforward estates. Handled by the court clerk without a hearing. Faster and less expensive.
- Formal probate: Required when there are disputes, complex assets, or the will is contested. Involves court hearings and judicial oversight.
- Small estate affidavit: For estates with less than $70,000 in personal property and $70,000 in real property, you may be able to use a simplified process.
Probate typically takes 6-12 months in Colorado, though complex estates can take longer. The good news is that you can often sell the property during probate once you have been appointed as personal representative.
Learn more: Read our detailed guide on selling a house in probate in Colorado.
Steps to Sell an Inherited House in Colorado
- Determine if probate is needed: Check how the property was titled and whether any probate-avoiding mechanisms were in place.
- Open probate (if required): File the necessary paperwork with the county district court where the deceased lived.
- Get appointed as personal representative: The court will appoint you to manage the estate, giving you authority to sell property.
- Get the property appraised: You will need to know the fair market value for tax purposes and to ensure a fair sale.
- Decide how to sell: Choose between listing with an agent, selling for sale by owner, or accepting a direct offer.
- Complete the sale: Transfer title to the buyer and distribute proceeds according to the will or intestate succession.
- Close the estate: File final paperwork with the court to formally close the probate.
Tax Implications of Selling Inherited Property
One advantage of inherited property is the "stepped-up basis." This means the property's cost basis for capital gains purposes is its fair market value at the date of the owner's death, not what they originally paid.
Example
Your parent bought a house for $100,000. At their death, it was worth $400,000. Your basis is $400,000 (the stepped-up value). If you sell for $410,000, you only owe capital gains tax on $10,000 of appreciation, not $310,000.
Colorado Tax Considerations
- Colorado has no state inheritance tax
- Colorado has no estate tax (though federal estate tax may apply to large estates)
- Capital gains are taxed as regular income in Colorado (4.4% flat rate)
- Property taxes must be kept current during the sale process
Note: Tax laws are complex and change. Consult a tax professional for advice specific to your situation.
Your Options for Selling an Inherited House
1. List with a Real Estate Agent
Pros: Potentially higher sale price, professional marketing, agent handles negotiations.
Cons: Agent commission (typically 5-6%), may require repairs and staging, takes longer (average 60-90 days), showings can be disruptive.
Best for: Properties in good condition when time is not a factor.
2. Sell For Sale By Owner (FSBO)
Pros: No agent commission, full control over the process.
Cons: Requires significant time and effort, may get lower offers without professional marketing, still requires repairs and showings.
Best for: Those with real estate experience and time to manage the sale.
3. Sell to a Direct Buyer
Pros: Fast closing (as few as 7-14 days), no repairs needed, no showings, no agent commissions, certainty of sale.
Cons: Typically below full retail market value (though often net proceeds are similar after accounting for repairs, commissions, and carrying costs).
Best for: Properties needing repairs, out-of-state heirs, time-sensitive situations, avoiding the hassle of traditional sales.
Ready to explore your options? Get a no-obligation offer for your inherited property in Colorado.
Timeline: What to Expect
Here's a general timeline for selling an inherited house in Colorado:
| Stage | Timeframe |
|---|---|
| File for probate | 1-2 weeks |
| Appointment as personal representative | 2-4 weeks |
| Creditor claim period | 4 months |
| List property (if using agent) | 60-90 days on market |
| Sell to direct buyer | 7-14 days to close |
| Close probate | 1-2 months after sale |
Total timeline: 6-12 months for a traditional sale during probate, or as few as 2-3 months if selling to a direct buyer and expediting the process.
Frequently Asked Questions
The timeline varies based on your situation. If probate is required, it typically takes 6-12 months in Colorado to complete. However, you can often sell the property during probate once you have been appointed as personal representative (usually 2-4 weeks after filing). If you sell to a direct buyer, closing can happen in as few as 7-14 days once you have authority to sell.
Inherited property receives a "stepped-up" basis, meaning your cost basis for capital gains purposes is the fair market value at the date of death, not what the previous owner paid. If you sell relatively soon at or near the inherited value, you may owe little to no capital gains tax. Colorado does not have a state inheritance or estate tax. Federal estate tax only applies to estates exceeding $13.61 million (2024). Consult a tax professional for your specific situation.
Sometimes. Probate is not required if the property was held in a revocable living trust, had a transfer-on-death (TOD) deed (also called a beneficiary deed), was owned as joint tenants with right of survivorship, or qualifies for a small estate affidavit (estates under $50,000 with no real property). Otherwise, you will need to go through probate to legally transfer title.
When multiple heirs inherit a property, all must agree on major decisions like whether to sell. You can sell the property and divide the proceeds according to the will or Colorado intestate succession laws. If heirs disagree, options include one heir buying out the others, or in extreme cases, a partition action through the courts. A direct sale can simplify this process by providing a clear, quick division of assets.
Not necessarily. While repairs can potentially increase the sale price on the open market, they require time, money, and effort you may not have. Additionally, repair costs do not always translate dollar-for-dollar to increased sale price. Direct buyers purchase properties completely as-is, eliminating the need for repairs and allowing you to sell faster. This is particularly valuable for inherited properties that may have deferred maintenance.
A personal representative (also called an executor or administrator) is the person appointed by the court to manage the deceased person's estate during probate. They have legal authority to pay debts, manage assets, and sell property on behalf of the estate. You need to be appointed as personal representative before you can legally sell real property during probate.
Key documents include: Letters Testamentary or Letters of Administration (issued by the probate court), the death certificate, the original will (if one exists), the current deed, property tax records, and any trust documents if applicable. If the estate is not yet in probate, you will need the will and death certificate to start the process. Title companies can help identify any additional documents required for your specific situation.
Yes. Many heirs live outside Colorado when they inherit property. The process is the same, though you will need to work with a Colorado probate attorney if the estate requires probate. For the actual sale, documents can be signed electronically or through a mobile notary in your location. Direct buyers are particularly well-suited for out-of-state heirs since you do not need to travel to Colorado for showings, repairs, or multiple visits.
If the deceased had a mortgage, the loan does not automatically transfer to heirs. However, heirs are responsible for continuing payments to avoid foreclosure. When you sell the property, the mortgage is paid off at closing from the sale proceeds, and any remaining equity goes to the estate or heirs. If the property is underwater (mortgage exceeds value), you may need to negotiate a short sale with the lender.
Colorado requires sellers to provide a Seller's Property Disclosure form. However, there is an exemption for estates where the personal representative never occupied the property, which is common with inherited homes. This allows sales to proceed without the extensive disclosures typically required. You must still disclose known material defects. Direct buyers typically purchase as-is and perform their own inspections.
A title search, performed by a title company, will reveal any liens, mortgages, unpaid property taxes, HOA assessments, or other encumbrances on the property. These issues are typically resolved at closing from the sale proceeds. We work with experienced title companies who can identify and help resolve any title issues as part of the transaction.
Informal probate is the simpler, faster, and less expensive option used when the will is valid and there are no disputes. It is handled by the court clerk without hearings. Formal probate requires court hearings and is used when the will is contested, there are disputes among heirs, or the estate is complex. Most straightforward inherited property situations qualify for informal probate.
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