Sell Inherited Property in San Francisco

Who Has Authority to Sell: Executor, Trustee, and Heir Roles in California

The power to sell comes from a document or a court order the law recognizes. A family agreeing among themselves is not enough. Who holds that power depends on the path the property took.

Probate. A personal representative is the person a probate court appoints to handle an estate. An executor is the person a will names for that job; an administrator is the personal representative the court appoints when no named executor serves, often because there is no will. Being named in a will is not enough on its own. Under Probate Code section 8400, a person has no power to administer the estate until appointed personal representative and the appointment becomes effective, which happens when the court issues letters, the document confirming the appointment. Before then, a named executor may pay funeral expenses and take necessary steps to maintain and preserve the estate, but cannot sell.

Trust. A trustee holds and manages property under a trust's written terms; a successor trustee is the person the trust names to take over when the original trustee dies or steps down. That authority comes from the trust document itself rather than from a court, and a title company typically asks to see the trust or a certification of it.

Transfer on death deed. This kind of deed passes the property directly to the person it names. Under Probate Code section 5652, a revocable transfer on death deed transfers the owner's interest at death to the beneficiary named in the deed, subject to the beneficiary's right to disclaim. The beneficiary must outlive the owner. If there is more than one beneficiary, they share the property equally as tenants in common, and if one beneficiary's share fails, it goes to the others in equal shares. The property comes with any recorded liens, leases and similar instruments, and without any warranty of title. Before selling, the beneficiary records an affidavit the code requires, together with proof of death.

Joint tenancy. A surviving joint tenant typically records an affidavit of death of joint tenant with a certified death certificate to clear title.

Where heirs or beneficiaries own shares together as co-owners, each co-owner signs for their own share. When co-owners cannot agree, California law provides a court proceeding called partition, which can lead to a sale and a division of proceeds. A contested matter between family members, or a suspicion of misconduct, is a separate subject handled by an attorney who litigates trust and probate cases.

Probate in San Francisco: When It Applies and How a Sale Works

Probate generally comes into play when the person who died owned real property in their own name, outside a trust, joint tenancy or a transfer on death deed. Where the case is filed depends on where the person lived, not where they died. Under Probate Code section 7051, if the decedent was domiciled in California, the proper county for administering the estate is the county of domicile, regardless of where the death occurred. For someone who lived in San Francisco, that is the Superior Court of California, County of San Francisco.

The court's Probate Court page says hearing dates for all appearance matters are assigned by the filing clerk at the time the petition is filed, that appearance hearings for probate matters other than the appointment of guardians and conservators, and motions, are held at 9 a.m. on Monday, Tuesday and Wednesday in Department 204, and that tentative rulings may be obtained online or by phone one to three days before the hearing. The page also links information on wills and decedents' estates and on trusts.

Smaller estates. California offers simplified procedures that can apply without full probate.

• Primary residence petition. Under Probate Code section 13151, an heir can ask the court to confirm that they have inherited the home when it was the decedent's primary residence in California, its gross value does not exceed a dollar limit that is adjusted periodically, and 40 days have passed since the death. The petitioner must deliver notice to each named heir and devisee within five business days of filing.
• Small-value affidavit. Under Probate Code section 13200, the affidavit for real property of small value may be filed no sooner than six months after the death, in the county of domicile, when the estate's California real property falls within a limit that, for deaths on or after April 1, 2022, is the adjusted amount in effect on the date of death.

The California Courts publish the current figures.

A sale in probate. As a general rule, a judge has to approve a probate sale before the buyer takes title. Under Probate Code section 10308, all sales of estate real property are generally reported to and confirmed by the court before title passes, whether by private sale or public auction and even if the will directs the sale, except as Probate Code section 10503 provides. If the personal representative does not file the report and petition for confirmation within 30 days after the sale, the buyer may file them.

The exception covers a personal representative who holds authority under the Independent Administration of Estates Act, a law that lets a court allow the representative to act with less court supervision. With that authority, Probate Code section 10503 says the court-confirmation requirements, such as publishing notice of the sale, court approval of agents' and brokers' commissions, the rule tied to appraised value and the judge's own review of whether the sale is needed and fairly priced, do not apply to the sale. In practice, a representative with full authority sends heirs and beneficiaries a notice of proposed action instead. Whether a court hearing is still needed depends on the authority the court granted and on whether anyone objects to that notice.

The type of buyer does not change any of this. A cash or direct buyer goes through the same court steps and notices as any other buyer.

Property Tax Reassessment and the Proposition 19 Parent-Child Exclusion

California property tax is based on assessed value, and a change in ownership generally resets that value. The San Francisco Office of the Assessor-Recorder's Change in Ownership page says all properties are required to be reassessed as of the date of a change in ownership, that certain exclusions may apply, and that Proposition 19 took effect February 16, 2021.

Filing after a death. Someone has to tell the assessor about the change, and who does so depends on the path. Under Rev. & Tax. Code section 480, when the property is in probate, the personal representative files a change in ownership statement with the county recorder or assessor before or when the inventory and appraisal is filed with the court clerk. In other transfers at death, including through a trust, the trustee or the person receiving the property files it within 150 days after the date of death. The Assessor-Recorder's page says failure to file can lead it to reassess as many as eight prior years.

The exclusion. Proposition 19 lets some families keep a parent's lower assessed value on the family home. For transfers on or after February 16, 2021, Rev. & Tax. Code section 63.2 lets a transfer of a parent's principal residence to a child avoid full reassessment if a claim is filed. The same applies to a grandparent's home passing to a grandchild when all of the grandchild's parents who are the grandparent's children have died. The conditions are:

• the home was the transferor's principal residence;
• it becomes the heir's principal residence within one year; and
• the heir files for the homeowners' or disabled veterans' exemption within a year.

Even then, part of the value may be reassessed: the statute adds to the prior taxable value any amount by which market value exceeds that value plus a limit set in the statute. The Assessor-Recorder publishes the current claim form and figures.

Why this matters for a seller. The claim generally must be filed within three years after the transfer, or before the property is transferred to a third party, or before an eligible heir stops living there, whichever comes first; a claim filed within six months after a supplemental or escape assessment notice is also timely. Because the exclusion depends on the heir living in the home, an heir who sells rather than moves in will generally not qualify, and the property tax during the months of a sale may reflect a reassessed value. The county assessor's office reviews any exclusion claim.

San Francisco's Real Property Transfer Tax on an Inherited Property Sale

A transfer tax is a charge on the deed that conveys property to a buyer. The Office of the Assessor-Recorder's Recording a Document page says transfer tax is collected by that office when a document transferring title to real property, such as a grant deed, is recorded.

The state law behind it, Rev. & Tax. Code section 11911, allows the board of supervisors of a county or a city and county to impose a tax on each deed by which realty sold is conveyed to a buyer when the consideration or value, not counting liens that remain on the property, exceeds $100. For this purpose, selling an inherited property to a buyer is treated like any other sale.

San Francisco sets its own amounts by city ordinance, so the tax on a particular deed depends on the sale price and on that ordinance. The Assessor-Recorder's recording pages publish the current amounts and recording fees. When a family compares sale options, the transfer tax belongs on the list of closing costs, alongside escrow and title charges, that come out of the sale price.

Separately, the San Francisco Treasurer & Tax Collector's Secured Property Tax Due Dates page says secured tax bills are mailed during the first two weeks of October, that the first installment becomes delinquent after 5:00 p.m. on December 10 and the second after 5:00 p.m. on April 10, and that payments must be received or postmarked by the due date. Taxes still owed at closing are usually settled through escrow.

Federal Income Tax Basis: The Step-Up Rule for Inherited San Francisco Property

Basis is the starting figure used to measure gain when property is sold. Under 26 U.S.C. § 1014(a), the basis of property acquired from a decedent is generally its fair market value at the date of death. The section also allows a few other values in specific cases: the value at an alternate valuation date or a special-use value where the estate makes the elections the section names, or, to the extent a particular estate-tax exclusion applies, the decedent's own basis.

In plain terms, a home bought decades ago generally does not carry its original purchase price into an heir's hands. The heir's basis is generally the date-of-death value, so a sale near that value may produce little or no gain. If the price later rises above that value, the gain is measured from the date-of-death basis; the basis itself does not move with the market.

For a married couple, 26 U.S.C. § 1014(b)(6) treats the surviving spouse's half of community property as acquired from the decedent when at least half of the whole community interest was included in the decedent's gross estate, so both halves may receive a new basis. Where an heir inherits only a share, the rule applies to that inherited share.

This is information, not tax advice. A CPA, an enrolled agent or a tax attorney applies the basis rules to a particular sale, including the date-of-death valuation that supports them.

Sale Options for an Inherited San Francisco Property: Listing, FSBO, and Direct Sale

An heir, executor or trustee has three broad ways to sell, and each trades one thing for another.

A listing with a licensed real estate agent puts the property in front of the open market, which can draw competing offers. In exchange, the seller pays a commission, often prepares the house, hosts showings, and waits on a buyer whose loan must close.

A sale by owner removes the listing agent's commission, but the seller handles pricing, marketing, showings, negotiation, disclosures and coordination with escrow and title, which takes time and some familiarity with the process.

A direct as-is sale to a buyer who pays cash and takes the house in its present condition usually means less preparation, fewer showings and no dependence on a buyer's lender. What it trades away is price: a direct offer is often lower than what the property might bring on the open market, because that buyer takes on the repairs, the risk and the expense of reselling. It changes nothing about probate, a court's confirmation, notices, liens or taxes.

Disclosures. Some inherited sales are exempt from the standard seller-disclosure rules. Under Civil Code section 1102.2, the Civil Code's seller-disclosure article does not apply to some transfers, including sales under court order such as sales ordered by a probate court in administering an estate, and sales by a fiduciary in administering a trust or a decedent's estate. The fiduciary exemption has its own exception: it does not apply when the trustee is a natural person, trustee of a revocable trust, and a former owner or an occupant of the property within the preceding year. Other disclosure duties may still apply, and the estate's or trust's attorney says which apply to a sale.

Families often tell which way fits by comparing written offers and estimated net proceeds, meaning the price less commissions, repairs, carrying costs, loan payoffs and closing costs. The question of selling or renting belongs in the same comparison.

San Francisco Property Types and What They Mean for an Inherited Sale

San Francisco's housing includes single-family houses, buildings divided into flats, condominiums and tenancy-in-common interests, called TICs, in which several owners share title to one building. Each carries its own title and sale questions.

A condominium sale usually involves the homeowners' association's documents. A TIC interest is a share of a building rather than a separate parcel, so the co-owners' agreement and any shared loan often shape who may buy and on what terms. A building with more than one unit may have tenants in place, and local tenant protections and existing leases affect access, timing and who will buy. The estate's attorney and a licensed real estate professional can explain the rules that apply, and the considerations are set out further for an inherited duplex or multifamily property.

Many heirs manage these questions from somewhere else in the Bay Area or out of state. Where an heir or another property is in another state, that state's law may apply to that part of the estate.

The Garn-St. Germain Act and Inherited Property with a Mortgage

A mortgage often contains a due-on-sale clause, a term letting the lender demand full repayment when the property is sold or transferred without its consent. Federal law limits that clause when a borrower dies. For loans secured by residential property with fewer than five dwelling units, 12 U.S.C. § 1701j-3(d) says a lender may not exercise that option upon a transfer by devise, descent or operation of law on the death of a joint tenant, a transfer to a relative resulting from the borrower's death, or a transfer where the borrower's spouse or children become owners, among the other transfers that subsection lists.

In practice, the inheritance itself generally does not let the lender call the loan. The loan still exists, payments still come due, and the family eventually decides whether to keep, refinance or sell. When the property is sold, the loan is paid off from the sale proceeds through escrow, like any other lien.

A reverse mortgage is a different kind of loan with its own terms after a borrower's death; the loan servicer and the estate's attorney can say what those terms require.

Getting an Offer on an Inherited San Francisco Property

Some families like to have a direct offer in hand so they can set it beside listing estimates. Silver Lining Inherited Property makes offers on inherited San Francisco properties for a direct as-is sale, with the trade-offs described in the sale-options section above: a direct offer is often lower than an open-market price. Asking for an offer carries no obligation to sell, and the estate's authority, the court's steps and the tax rules described above remain the same. A sale checklist can help organize the comparison.