She should have re-titled the property. It should be done now. Go to the county records department with the death certificate and do this now. It needs to be done. Then try to figure out the step up in basis for future sales purposes.
Any other joint property (bank accounts, CDs, Brokerage Accounts, rental property, etc) should be retitled immediately as well. If there were any stocks in a joint brokerage account, there is a step up in basis as well.
Not enough info to talk about an estate return, but since there is a refi in progress, I am guessing they probably did not have enough assets to worry about death taxes.
Hopefully, a tax return was filed in the year of death indicating the spouse died, so the IRS records are clean. Even if there was no filing requirement, I always advise my clients to file a return in the year of death to make sure the IRS records are updated (fraud?).
Just my thoughts and what I share with my clients in this situation.
Tom
Modesto, CA