Selling a house after your spouse dies in Maryland: tenancy by the entirety, the mortgage, and what the title company records

The first question a surviving spouse asks a title company is whether the house has to go through probate. For most married couples in Maryland the answer is no. The deed did the work years ago. What follows is which papers the title company asks for, how the mortgage servicer is required to treat you, the tax window that starts running the day of the death, and how to sell the house on your own schedule when you decide it is time.

Why the house is usually already yours

Section 4-108 of the Real Property Article says that a deed to a married couple creates a tenancy by the entirety unless the deed says something else. That form of ownership carries a right of survivorship. When one spouse dies, the survivor owns the whole house by operation of law, the same minute, with no will, no court order and no new deed needed. A couple who took title as joint tenants with right of survivorship gets the same result.

At closing the title company records a certified copy of the death certificate in the county land records with the deed to the buyer, so the chain of title shows how the second name came off. Order several certified copies from the Maryland Division of Vital Records at the start. The bank, the insurer and the title company each want one, and a photocopy will not do.

When probate does come into it

Three deed situations send the house through probate before it can sell. The house was in the deceased spouse’s name alone. The couple held as tenants in common. Or the couple divorced and never redid the deed, because an absolute divorce turns a tenancy by the entirety into a tenancy in common. In each case the deceased spouse’s interest belongs to the estate, a personal representative has to be appointed, and the sale waits for letters. Our probate article walks through that process and our letters of administration article covers how long it takes.

The mortgage servicer cannot call the loan

A surviving spouse who was never on the note still gets to keep the loan. The Garn-St Germain Act, at 12 U.S.C. 1701j-3(d)(3), bars a lender from using the due-on-sale clause when the house passes to a spouse on the borrower’s death. Since April 2018 the federal servicing rules in Regulation X go further: once you send the servicer a death certificate and proof you own the house, it has to confirm you as a successor in interest, and offer you the same loss mitigation options the borrower would have had.

Keep paying it while you decide. A missed payment after a death starts the same foreclosure clock as any other, and the servicer does not pause it out of sympathy. A reverse mortgage runs on different and shorter rules; our reverse mortgage article covers that case. When you sell, the title company orders the payoff and the loan is paid from your proceeds at settlement. Nobody asks you to pay it off first.

The tax window that starts at the death

Maryland charges no inheritance tax on anything passing to a spouse, and its estate tax does not start until the estate passes $5,000,000, so for nearly every family the state tax bill on the house is zero. The federal rules matter more. Your spouse’s half of the house takes a new tax basis equal to its value on the date of death. If the two of you paid $200,000 decades ago and the house is worth $500,000 now, half of that gain disappears for tax purposes on the day your spouse dies.

The second rule is the one people miss. A married couple filing jointly can exclude up to $500,000 of gain on a home they owned and lived in for two of the last five years. A single filer gets $250,000. Section 121(b)(4) of the tax code lets a surviving spouse keep the $500,000 figure for a sale that closes within two years of the death, as long as neither of you had used the exclusion in the two years before. After that it drops to $250,000. For a house with a lot of appreciation, that date decides whether the sale is tax free, and it is the reason to decide early rather than drift. Our capital gains answer has the general rules.

Selling the house on your own timeline

Most of the people who call us in this situation are not in a hurry to sell. They are in a hurry to be done deciding. A listing means clearing it out, fixing what the inspector flags and letting strangers through it for a month or two. A sale to us means none of that. You tell us the address, we look at the house in person or on video, and we send a written offer within a day with the math shown next to what a listing would net. We close through a licensed Maryland title company, two to three weeks is typical, and you pick the date. Our inherited house page covers the version where the house came through probate, and our costs page shows what a listing takes out of the check in your county.

Nobody should rush this in the first weeks. But know the facts before it drifts: the house is yours without a court, the lender cannot take the loan away, and the tax code gives you two years to sell on the better terms. Decide inside that window and the rest is paperwork.