Most good stories start with a fundamental list of ingredients: the initial situation, conflict, complication, climax, suspense, denouement, and conclusion. Great writers sometimes shake up the recipe and add some spice.
Initial Situation
At the start of the novel, Hepzibah Pyncheon has been living shut away in her house for the past 30 years and Clifford Pyncheon has been in jail.
The House of the Seven Gables does not start out in a good place. The Pyncheon family is under a curse thanks to an ancestor who stole land from a man by accusing him of witchcraft and getting him hanged. Ever since then the family has been burdened with a stern, greedy, grasping spirit: they have evil in their blood. Two family members in particular have really suffered as a result of this family trait: Hepzibah Pyncheon and her brother Clifford. Clifford has been framed for murder by his vicious cousin, Judge Jaffrey Pyncheon. And Hepzibah has locked herself away for 30 years after her brother's conviction, wallowing in grief and bitterness. Not a good scene.
Conflict
Things start to change at the House of the Seven Gables: Phoebe Pyncheon arrives from the country, Hepzibah opens a shop, and Clifford gets released from prison.
Nothing has changed at the House of the Seven Gables for the past 30 years. Then, suddenly, a bunch of things happen in quick succession: Hepzibah grows so poor that she has no choice but to rejoin society by opening a store. Her lively country relation Phoebe comes to stay and help her with the house and shop. And Hepzibah's brother Clifford comes home from jail.
Complication
Judge Jaffrey Pyncheon threatens to put Clifford in an asylum if he doesn't show Pyncheon the secret to his dead uncle's treasure.
Lots of forces are working to break apart the gloomy influence of the House of the Seven Gables on Hepzibah and Clifford's lives. Phoebe is a ray of sunshine, the shop is bringing in cash, and Clifford is recovering his spirits. But the curse of the Pyncheon family fights back! Judge Jaffrey Pyncheon starts keeping an eye on the House of the Seven Gables. He insists on seeing poor Clifford, who begs to be left alone. But Judge Pyncheon is too greedy for pity. He is sure that Clifford is hiding some long-forgotten secret wealth from him. So the Judge forces a confrontation.
Climax
Judge Pyncheon suddenly dies in the House of the Seven Gables parlor.
Judge Pyncheon threatens to put Clifford in an asylum if he doesn't give up the secret wealth he has supposedly stored away. But just when everything seems ruined, Judge Pyncheon suddenly dies. Clifford is free of this monster who has been persecuting him. Thrilled with this development, Clifford grabs Hepzibah and they run out of the House of the Seven Gables. But – then what?
Suspense
Clifford and Hepzibah go on the run.
The suspense of the rest of the novel lies in figuring out the fallout of Judge Pyncheon's death for Clifford and Hepzibah. They have a lot to lose. When Judge Pyncheon doesn't come home that evening, the whole neighborhood starts to suspect Clifford and Hepzibah of murdering him. If Clifford and Hepzibah don't tell the city marshal that Judge Pyncheon is dead, it'll look even more like they killed him. At the same time, as Mr. Holgrave (the lodger) explains to Phoebe, Judge Pyncheon's natural death is very similar to his Uncle Jaffrey Pyncheon's death 30 years before. So if Clifford comes back before the body is discovered, they can use Judge Pyncheon's body to clear Clifford's name of the (faked) murder of his uncle.
Denouement
Clifford and Hepzibah comes back to the House of the Seven Gables and tell the authorities about Judge Pyncheon's sudden death.
Clifford and Hepzibah eventually grow tired of their flight and return to the House of the Seven Gables. Luckily, Phoebe and Mr. Holgrave are waiting to explain that (a) Phoebe and Mr. Holgrave are getting married! And (b), it's safe to go public with Judge Pyncheon's death. Gossip links Judge Pyncheon's death to Uncle Jaffrey Pyncheon's; everyone realizes that Uncle Jaffrey Pyncheon died of natural causes and that Judge Pyncheon framed Clifford; and Clifford's name is finally cleared.
Conclusion
Clifford, Phoebe, and Hepzibah inherit Judge Pyncheon's fortune and move out of the House of the Seven Gables.
All that's left now is the mopping up. Judge Pyncheon has died without heirs, so his money goes to Clifford, Hepzibah, and Phoebe. With this inheritance, they finally have the freedom to ditch the moldy old House of the Seven Gables. Mr. Holgrave also reveals that he is the descendant of Colonel Pyncheon's original victim, Matthew Maule. By marrying Phoebe, Mr. Holgrave puts an end to the long years of bad blood between the Maule and Pyncheon families. All's well that ends well!