You Just Inherited a House in Colorado - Here is what to do

You got the call. A family member passed, and now you're dealing with a house — maybe a mountain cabin in Evergreen, maybe a suburban home in Lakewood, maybe a property you've never even seen.

You're grieving, and now you're also supposed to figure out mortgages, probate courts, and property taxes? Nobody prepares you for this.

I'm Ines McCanna, and I run Radix Real Estate Co here in Colorado. I work with families going through exactly this situation every month. This guide is everything I wish someone would hand to every personal representative and heir on day one.

First: Take a Breath

There's no emergency. The house isn't going anywhere. Most of the decisions you need to make can wait a few weeks while you get your bearings.

The only urgent things are:

1. Make sure the property is secure** (locked, no immediate hazards)

2. Keep the insurance active** (call the carrier and let them know the situation — an unoccupied home may need a policy update)

3. Keep the heat on** (Colorado winters and empty houses don't mix — frozen pipes are expensive)

Everything else can wait until you're ready.

Do You Need Probate?

Not always. In Colorado, how the property is titled determines whether it goes through probate:

• Joint tenancy with right of survivorship:** Property passes automatically to the surviving owner. No probate needed for this asset.

• Transfer-on-death deed (beneficiary deed):** Property passes directly to the named beneficiary. No probate needed.

• Property in a living trust:** Passes according to the trust terms. No probate.

• Property in the deceased's name only:** This goes through probate. A personal representative (PR) will be appointed by the court to manage the estate.
  

If probate is needed, don't panic — it's a process, not a punishment. A good probate attorney will guide you through it, and in Colorado, it's relatively straightforward compared to other states.

The Probate Timeline in Colorado

Here's what's realistic:

• PR appointment: Usually 2-4 weeks after filing

• Creditor claim period: 4 months minimum (required by law)

• Total probate timeline: 6-12 months for most estates, sometimes longer if there are complications

The key thing to know is you typically don't have to wait until probate closes to sell the property. Once the PR is appointed and has Letters Testamentary (or Letters of Administration), they usually have the authority to sell. This is a big deal because holding a property for 12+ months gets expensive. Some of my clients waited while others sold the home as soon as they had the authority to do so. This is a very personal decision, and one that as a personal representative you ultimately will make. Taking into account what the estate beneficiary’s will want is a huge factor to consider as well. My best practice and advice is to have the conversation early, interview real estate agents and have them involved in the process so the agent can explain the sale process to all decision makers and set the right expectations with all heirs. Small actions now will help in the long run.

Let’s talk money: What's It Costing You?

This is the question I ask every personal representative in our first conversation:

What is it costing the estate every month to hold this property?

Then we add up all the costs:

- Mortgage payment

- Property taxes (monthly escrow or annual — know which)

- Homeowner's insurance

- HOA dues

- Utilities

- Lawn care / snow removal

- General maintenance

For a typical Colorado home, this can easily run **$2,000-$5,000+ per month. That's money coming directly out of the estate — and ultimately out of the heirs' inheritance. This number doesn't mean you HAVE to sell immediately. But it should inform your timeline. If the property is a rental, the rental agreement may shape how you proceed. And if one of the heirs is living in the home, especially if it is rent free, this may caused discord if there are multiple heirs. As your real estate agent, I am here to help walk you through all possible options and leverage past experience and best practices to avoid any potential conflict or stress.

There are a few different paths forward. Let’s review them:

Option 1: Sell the Property

The most common choice. The PR lists the property, sells it, and the proceeds go to the estate for distribution to heirs (after debts and expenses are paid).

Sell as-is or fix it up?** This depends on the property and the market. I always recommend getting a professional opinion before spending a dime on repairs. Sometimes $5,000 in paint and carpet adds $20,000 in value. Sometimes $50,000 in renovations adds $30,000. Know the numbers first.

You will get letters, notes, from investors, who want to buy the property as is for cash. Is it the right thing to follow that path? Maybe. That is the honest answer. As your real estate agent it is my job to advocate for you and your goals. Some homes will not get more traction on the open market or MLS. Some seller’s don’t want to coordinate showings, nor deal with repairs of a run down inherited home. If that is you, selling to an investor for cash may be a reasonable option. Even the best option. You can rely on me to go over all available sale options with you, so you can decide for yourself and the estate on how to move forward. We will review numbers, pros and cons, timelines etc to keep everything transparent for you and the heirs.

Option 2: One Heir Keeps It

An heir can "buy out" the other heirs at fair market value. This works well when one person has an emotional attachment to the property (family home, mountain cabin) AND has the financial means to take over. In this case a real estate agent can provide a CMA to guide the price. Ultimately the heirs have to agree upon it. A professional appraisal will need to occur during the transaction. In this situation I would recommend you negotiate a lower fee for real estate services because there is no marketing cost involved.

Option 3: Rent It

If the market isn't favorable for selling, or if the property generates good rental income, the estate or heirs may choose to rent it — short-term or long-term. This works especially well for mountain properties near ski areas or Evergreen, where short-term rental demand is strong. However, this will demand a lot more from you in management, and hiring a property manager is probably the best way forward.

Option 4: Hold It

Sometimes the right answer is to wait. Maybe the market is about to improve, or maybe the estate needs time to settle other matters first. Just know the carrying costs and make it a conscious decision, not a default one.

The Tax Break You Need to Know About

This is probably the most important financial concept for inherited property: the stepped-up cost basis.Here's how it works:

Your grandmother bought her house in 1990 for $120,000. When she passed in 2026, it was worth $550,000. If she had sold it herself, she would owe capital gains tax on the $430,000 gain. But because you **inherited** it, your cost basis "steps up" to $550,000 — the fair market value at the date of death.If you sell it for $560,000, you only owe capital gains on $10,000. That's a potential savings of tens of thousands of dollars.

**Important:** Get a professional appraisal as of the date of death. This establishes your stepped-up basis and protects you if the IRS ever questions it. Your CPA can advise you on the specifics.

Mountain Properties: Extra Considerations

If the inherited property is in Evergreen, Conifer, Morrison, Idaho Springs, or anywhere in Colorado's Foothills, there are things a Denver-based agent might miss:

Well and septic systems need inspection — if the house has been sitting empty, the well pump may need attention and the septic should be evaluated

Propane tanks may need refilling, and the account needs to be transferred or closed

Fire mitigation is required in many mountain communities — the property may need defensible space work before selling

Winter access — steep driveways, snow load on roofs, and frozen pipes are real concerns

Wildlife — I've walked into inherited mountain homes with evidence of everything from mice to bears. Check before showing.

This is why you want an agent who actually lives and works in the mountains — not someone who needs GPS to find your driveway.

Building Your Team

Settling an estate with real property takes a team:

**Probate attorney** — handles the legal process, court filings, and PR duties

**CPA** — handles estate taxes, income taxes, and capital gains planning

**Real estate agent** — handles the property valuation, marketing, sale, and coordination

**Title company** — handles the title search, closing, and deed transfer

The best outcomes happen when these professionals communicate with each other. A good agent will coordinate with your attorney and CPA so you're not playing telephone between three different offices.

When to Call a Real Estate Agent?

Now. Seriously.

Even if you're months away from selling, a conversation with an experienced probate real estate agent costs you nothing and could save you thousands. Here's what I do in a free initial consultation:

- Walk the property and assess its condition

- Provide a market analysis (what it's worth right now)

- Advise on repairs — what's worth doing and what's not

- Explain the selling process specific to probate

- Help you understand your timeline and options

No pressure, no obligation. The goal is to give you the information you need to make good decisions for your family.

Ines McCanna is the founder of Radix Real Estate Co, serving Evergreen, Morrison, Golden, and the greater Denver metro area. She specializes in helping families navigate real estate during probate and estate settlement.**

📞 720-429-2927| 📧 ines@radixrealestateco.com | 🌐 www.radixrealestateco.com