What are closing costs in Utah, and who pays them?

Closing costs are the expenses of completing the transaction, separate from the purchase price itself. They tend to surprise people because they are rarely discussed until an offer has already been written. The fix is to see them early on one page, which is exactly what a seller net sheet is for.

This article sets out the categories and how they are customarily allocated in Utah residential transactions. It does not give a percentage, and that omission is deliberate: the figures vary widely by loan type, lender, price point and property, and a general rule of thumb is wrong often enough to be unhelpful. What follows is intended to help you read your own disclosures and ask informed questions of your lender and title company.

These are separate from your deposit and your down payment — see what earnest money is in Utah and how much a down payment is in Utah.

Commission is a separate question from closing costs, and it changed in 2024 — who pays the real estate agent when you buy in Utah.

Charges customarily paid by the buyer

Lender charges. Origination, underwriting and processing fees. These differ meaningfully between lenders for otherwise identical loans, which is the strongest practical argument for obtaining more than one quote.

Appraisal fee. Ordered by the lender and generally paid by the borrower, often in advance.

Lender’s title insurance policy. Protects the lender’s interest in the property. Ordinarily required where there is financing.

Escrow and settlement fees. The title or settlement company’s charge for administering the closing.

Recording fees. Payable to the county for recording the deed and the security instrument.

Prepaid interest. Interest accruing from the closing date through the end of that month.

Homeowner’s insurance. Commonly the first year’s premium, paid at or before closing.

Escrow reserves. Funds collected in advance to establish the escrow account from which the servicer pays taxes and insurance.

Prorated property tax. Your share from the closing date forward. Utah’s assessment structure, including the primary residential exemption, is worth understanding separately, as it materially affects the annual figure.

Inspection fees. Paid during the due diligence period rather than at closing, but they belong in the same budget.

Flood insurance, where the property requires it. Worth establishing early, as the cost can be significant.

HOA transfer, setup and document fees, where an association exists. These are commonly overlooked and occasionally substantial.

Charges customarily paid by the seller

Real estate brokerage compensation, in accordance with the agreements in place. What is agreed, and who pays it, is negotiable and should be settled in writing before the home goes on the market rather than assumed.

Owner’s title insurance policy. In Utah it is customary, though not invariable, for the seller to provide the owner’s policy for the buyer. The premium scales with the purchase price.

The seller’s share of escrow and settlement fees. The title company charges for conducting the closing, and the split is commonly negotiated rather than fixed by rule.

Prorated property tax through the closing date. Utah property tax is billed in arrears, which catches sellers out more than any other line — your share of the year you owned the home is settled at closing as a proration rather than arriving later as a bill.

Mortgage payoff. Note that the payoff figure exceeds the statement balance once interest through the payoff date is included. Sellers relying on a specific net figure are caught by this regularly.

Recording fees associated with releasing existing liens. Clearing your mortgage from title means recording a release, and the county charges for it.

HOA transfer and document fees, where applicable. In a county where a great many neighborhoods are governed by associations, these appear often. The association or its management company charges for producing documents and processing the transfer. Ask early what yours charges — they vary widely and are frequently discovered late.

Agreed concessions, such as repair credits or a contribution toward the buyer’s closing costs. These come off your proceeds and belong in your net sheet from the beginning.

Allocation is customary, not mandatory

An important distinction: who pays what is a matter of convention and negotiation, not law. Local custom provides the starting point; the purchase contract determines the outcome.

Seller concessions toward buyer closing costs are a common and legitimate structure, particularly where a buyer has sufficient income to support the payment but limited cash at closing. Depending on circumstances this may be more valuable to the buyer than an equivalent reduction in price, because it addresses the binding constraint. Concessions may be limited by loan program guidelines, so confirm permitted amounts with your lender before relying on them.

Interest rate buydowns operate similarly, with the seller contributing toward a reduction in the buyer’s rate rather than the price.

New construction warrants particular care. Builders frequently offer closing cost incentives conditioned on using an affiliated lender. Evaluate the complete package — rate, points, fees and credit together — rather than the credit in isolation, as an attractive incentive attached to above-market financing may not represent a net benefit.

The disclosures that give you real figures

Federal law provides two documents specifically designed to answer this question for your transaction.

The Loan Estimate. Under Regulation Z, the creditor must deliver or place in the mail the Loan Estimate no later than the third business day after receiving your application (12 CFR § 1026.19(e)(1)(iii)). It uses a standardized format, which allows genuine like-for-like comparison between lenders. Obtaining estimates from more than one lender and comparing them side by side is among the most effective steps available to a borrower.

The Closing Disclosure. You must receive it no later than three business days before consummation (12 CFR § 1026.19(f)). Review it against your Loan Estimate and raise any material differences with your lender before closing. Certain charges are subject to tolerance limitations and may not increase beyond specified thresholds; others may. Your lender can explain which category a given item falls into.

For sellers: a net sheet. This is the calculation from contract price down to anticipated proceeds, after costs and payoff. Where the sale funds a subsequent purchase, that figure is the foundation of the entire plan, and estimating it informally is how sellers find themselves short. Request one before listing rather than after receiving an offer.

Why this article does not quote a percentage

The range is genuinely wide, and a figure approximately correct for one transaction can be materially wrong for another.

The principal variables are the loan type and whether financing is involved at all, the lender’s fee schedule, the purchase price, the presence of an HOA, whether flood insurance is required, the timing of closing relative to the property tax calendar, and what the parties negotiate.

Figures published in national surveys are averages across markets and loan types and cannot account for any of that. A written estimate on the specific property costs nothing and takes a lender very little time.

Points on which people are most frequently caught out

HOA transfer fees, which appear late and are easily omitted from a budget.

Escrow reserves. Buyers plan for the down payment and closing costs and overlook that several months of taxes and insurance are collected in advance. These funds are credited to your account rather than lost, but they must be available at closing.

The seller’s payoff figure, which exceeds the statement balance.

Treating the Loan Estimate as final. It is an estimate. Compare it against the Closing Disclosure and ask about any variance.

Costs arising after closing — moving, immediate repairs, window coverings and initial utility deposits. Closing is not the final expenditure.

I am Kelsey Earl, a Realtor with Keller Williams South Valley, and the surprise is never the existence of these costs. It is that a seller quoted their equity to themselves and never subtracted anything from it.

What to do next

If you are purchasing, request a Loan Estimate from at least two lenders. If you are selling, obtain a net sheet before listing. Ask about the title line specifically, because whether you need title insurance in Utah involves two separate policies and only one of them protects you.

Both are provided at no cost and take very little time, and both replace estimation with figures specific to your transaction.

Contact me and I will refer you to lenders who respond promptly and produce clear estimates, or prepare a net sheet for your property so you know what the transaction is likely to yield.

Two of those line items deserve their own reading. What you actually net at the end puts the seller’s side together, and what due diligence covers explains the window in which a buyer can still change their mind.

Note: This article is general information about Utah residential transactions and is not legal, tax or financial advice. Closing costs and their allocation vary by transaction and by lender. Rely on your Loan Estimate, your Closing Disclosure, your settlement statement and your title company for figures applicable to any specific purchase or sale, and consult a qualified professional regarding your circumstances.