First-Time Homebuyer's Guide to Title Insurance in Utah

Congratulations—you're buying your first home! Whether it's a starter home in West Jordan, a townhouse in Provo, a newly built property in St. George, or a historic bungalow in Sugar House, this is one of the most exciting and significant financial decisions you'll ever make. It's also probably one of the most confusing, with unfamiliar terms like escrow, appraisal, underwriting, and—perhaps most mysterious of all—title insurance.

If you're like most first-time buyers, you might be wondering: What exactly is title insurance? Why do I need it? How much will it cost? Who pays for it? What happens at closing? This comprehensive guide answers all these questions and more, giving you the knowledge you need to navigate the title insurance and closing process with confidence. By the time you finish reading, you'll understand why title insurance is one of the most important protections you'll purchase—and why choosing the right title company can make your first home purchase smooth and stress-free.

What Is Title Insurance and Why Should First-Time Buyers Care?

Let's start with the basics. Title insurance is a policy that protects your ownership interest in real property. The "title" is your legal right to own, use, and sell the property—it's the bundle of ownership rights you're purchasing. Title insurance ensures that the title you're receiving is valid and protects you if problems emerge later.

Here's what makes title insurance different from every other type of insurance you're familiar with. Your car insurance protects against future accidents. Your health insurance covers future medical needs. Your homeowners insurance guards against future damage to the property. But title insurance protects against past problems—issues that already existed before you bought the home but weren't discovered until after closing.

These hidden defects could include a variety of serious problems. Someone might have forged a signature on a deed years ago, meaning the current seller doesn't actually have legal authority to sell to you. A previous owner might have died and unknown heirs could emerge claiming partial ownership. There could be errors in public records—wrong legal descriptions, improperly recorded documents, or clerical mistakes at the county recorder's office. Undiscovered liens might exist, such as a contractor who wasn't paid for work done years before, or an old judgment that was never properly released. There could be fraud in the chain of ownership, like identity theft or impersonation.

If any covered title defect emerges after you close, your title insurance company will do one of three things: pay to fix the problem (such as clearing a lien), defend your ownership in court at their expense, or compensate you for your financial loss if the problem can't be fixed. This protection is invaluable and far exceeds the one-time cost you pay at closing.

How Much Does Title Insurance Cost in Utah? What Will I Pay at Closing?

One of the first questions every first-time buyer asks is: how much is this going to cost me? The good news is that title insurance in Utah is a one-time expense, not an ongoing monthly premium like other insurance. Once you pay for it at closing, you're covered for as long as you own the property—no renewals, no recurring fees.

The cost of an owner's title insurance policy in Utah typically ranges from $1,000 to $3,000 depending on your home's purchase price. The premium is based on the property's value because the insurance company's potential liability increases with higher-priced properties. Here's what you might expect to pay:

If you're obtaining a mortgage (which most first-time buyers do), you'll encounter two separate title insurance policies. The owner's policy protects you and your ownership interest—this is the policy we've been discussing. The lender's policy protects your mortgage lender's interest in the property. Banks require borrowers to purchase a lender's policy to protect the bank's loan. The lender's policy is typically $400-$1,000 and decreases in coverage as you pay down your mortgage, eventually expiring when the loan is paid off.

In Utah, there's a strong custom that the seller pays for the owner's title insurance policy. This makes sense because the seller is responsible for delivering clear title to you, and purchasing the title insurance policy is part of fulfilling that obligation. However, customs aren't laws—who pays for title insurance is negotiable in your purchase contract. In competitive markets where sellers receive multiple offers, some buyers agree to pay for their own owner's policy to make their offer more attractive.

Beyond the insurance premiums, your closing will include other title-related fees. These might include the title search and examination fee (sometimes included in the insurance premium, sometimes separate), the closing or escrow fee for the title company's services in coordinating the closing, recording fees to file your deed and mortgage with the county recorder (usually $50-$100 per document), and courier fees if documents need to be expedited. Your Closing Disclosure, which you'll receive at least three business days before closing, will detail every fee.

What Actually Happens During the Closing Process?

For first-time buyers, closing can feel intimidating—you're signing dozens of documents, transferring large sums of money, and making binding legal commitments. Understanding the process removes much of the stress. Here's what to expect:

Before Closing Day: The Title Search and Preparation

Once your purchase contract is accepted, the title company begins working behind the scenes. A title examiner conducts a comprehensive search of public records to trace the property's ownership history and identify any liens, encumbrances, or defects. In Utah, this means searching records at the county recorder's office, clerk of court, tax assessor, and various other government offices.

Within a week or so, you'll receive a preliminary title report (also called a title commitment) showing what the title search discovered. This document lists the current owner, the legal description of the property, any liens or mortgages that need to be paid off, and any easements, restrictions, or encumbrances that will remain on the property after you purchase it.

Review this report carefully—ideally with your real estate agent and the title officer. Make sure the property description is correct, verify that the current owner matches who's selling to you, and ask about anything you don't understand. The title company will work to clear any issues identified in the report before closing.

Three Days Before Closing: The Closing Disclosure

Federal law requires your lender to provide a Closing Disclosure at least three business days before closing. This detailed document shows your final loan terms, your monthly payment, how much you're paying for the home, and—most importantly for our purposes—an itemized list of every closing cost you're paying.

Review your Closing Disclosure carefully. Verify that the numbers match what you were expecting based on your Loan Estimate (which you received when you applied for your mortgage). Look at who's paying for what—you should see the owner's title insurance premium, typically in the seller's column, and the lender's title insurance premium in your column. Check all the title and escrow fees. If you see unexpected charges or amounts that seem wrong, contact your lender and title company immediately to clarify.

Closing Day: Signing and Transfer

Closing typically takes place at the title company's office and lasts anywhere from 30 minutes to an hour, though you should plan for longer in case questions arise. Here's the typical flow:

You'll meet with a closing agent (an employee of the title company trained to conduct closings). They'll guide you through every document you need to sign, explaining each one's purpose. Don't hesitate to ask questions—it's far better to slow down and understand what you're signing than to rush through and regret it later.

If you're obtaining a mortgage, you'll sign your loan documents first. These include the promissory note (your promise to repay the loan), the deed of trust (which gives the lender a lien on your property as security), and various disclosures and affidavits required by your lender and federal/state law.

Next, you'll sign the deed that transfers ownership from the seller to you. In Utah, this is usually a warranty deed or special warranty deed. This single document is the culmination of your entire home-buying journey—it's what makes the property legally yours.

You'll also sign various closing documents including the settlement statement, affidavits confirming your identity and intentions, and documents related to property taxes, homeowners insurance, and your down payment source.

Before or at closing, you'll need to provide your down payment and closing costs. This is almost always done via wire transfer or cashier's check—personal checks aren't accepted because the funds must be guaranteed. Your closing agent will provide wiring instructions well before closing day. Be extremely careful with wire transfers—verify the instructions by calling the title company at a number you look up yourself (not one provided in an email, as wire fraud is common).

Once all documents are signed and funds are received, the closing agent will provide you with copies of everything you signed, proof of your payment, and—the moment you've been waiting for—the keys to your new home!

After Closing: Recording and Your Title Policy

After you leave the closing table, the title company's work continues. They deliver your deed and your lender's deed of trust to the county recorder's office to be filed in the public records. Recording makes your ownership official—it's what establishes you as the legal owner in the eyes of the law and the world.

In Utah's more populated counties like Salt Lake, Utah, and Davis counties, recording often happens the same day or next day electronically. In smaller counties, it might take a few days. Once your deed is recorded, you'll receive a recorded copy showing the date and time it was filed and a document number for future reference.

Within a few weeks after closing, you'll receive your actual title insurance policy in the mail. This is the formal insurance contract, and you should keep it with your other important documents. While you hopefully will never need to use it, it's your proof of coverage if title problems emerge down the road.

What Common Questions Do First-Time Buyers Have About Title and Closing?

In our nearly 60 years of helping Utah buyers, Prospect Title has heard certain questions over and over from first-time purchasers. Here are the answers to the most common:

"Can I choose my own title company, or do I have to use who my agent suggests?" You have the absolute right to choose your own title company. While your real estate agent, lender, or seller may recommend a company (and their recommendations are often good since they work with reputable firms), the choice is ultimately yours. You might want to choose based on recommendations from friends, online reviews, proximity to your home or work, or specific expertise. Don't feel pressured—it's your transaction.

"Do I need a lawyer for closing in Utah?" Utah does not require attorneys to be present at real estate closings. The closing agent (employed by the title company) is trained to handle the paperwork and can answer questions about the documents you're signing. However, you're always welcome to hire an attorney to review documents or attend closing with you, particularly if you have complex issues or feel uncomfortable proceeding without legal counsel.

"What if we find problems with the house right before closing?" Most purchase contracts give you the right to do a final walk-through inspection shortly before closing (often the day before or morning of closing). If you discover new damage or problems that weren't there during your earlier inspection, don't ignore them. Contact your agent immediately—you may be able to delay closing until the seller fixes the issues, negotiate a credit at closing to compensate you, or in severe cases, cancel the contract. Don't proceed with closing if there are significant unresolved problems with the property's condition.

"When can I move in?" You can take possession once closing is complete and you have the keys. Your purchase contract specifies the possession date—sometimes it's immediately at closing, sometimes it's a few days later to give the seller time to move out. Don't start moving in or making changes before you officially close and take possession, even if the seller gives you permission—this creates legal liability if something goes wrong with the closing.

"What happens to the seller's mortgage?" The seller's mortgage (if they have one) is paid off at closing from your purchase funds. The title company obtains a payoff statement from the seller's lender showing exactly how much is needed to release the loan, then sends those funds to the lender at closing. The lender records a release, and the property transfers to you free of the seller's mortgage. This is all handled behind the scenes—you don't need to do anything except provide your funds.

How Do I Choose the Right Title Company for My First Home Purchase?

Not all title companies are created equal, and choosing the right one can significantly impact your experience. Here's what to look for:

Local experience and expertise. Choose a title company with deep roots in Utah and specific experience in the county where you're buying. Local companies understand regional quirks—like how the Salt Lake County Recorder's office operates differently from Washington County's, or the common title issues that arise in historic neighborhoods versus new subdivisions. Prospect Title has been serving Utah since 1967, giving us unmatched knowledge of local property records, common title issues, and county-specific practices.

Financial stability. Your title insurance is only as good as the company backing it. Choose a financially stable company that will be around decades from now if you need to make a claim. Ask about their underwriters (the insurance companies that back their policies) and look for well-established, highly-rated firms.

Communication and customer service. Buying your first home is stressful and confusing. You want a title company that returns your calls and emails promptly, patiently answers your questions without making you feel foolish, explains complex concepts in plain language, and keeps you informed throughout the process. Read reviews and ask friends about their experiences.

Specific expertise for your situation. If you're buying a condo, choose a company experienced with condominium transactions. If you're purchasing new construction, find a company that regularly works with builders. If you're buying rural property with water rights or mineral issues, expertise in those areas is crucial.

Technology and convenience. Modern title companies offer online access to documents, electronic signing options, and digital communication that makes the process more convenient. If you travel for work or have scheduling challenges, these services can be invaluable.

Competitive but not suspiciously cheap pricing. Get quotes from multiple title companies and compare the total costs, not just the insurance premium. Be wary of companies whose prices are dramatically lower than competitors—they may be cutting corners on the title search or have hidden fees that emerge at closing. The cheapest option isn't always the best value.

What Utah-Specific Title Issues Should First-Time Buyers Know About?

While the principles of title insurance apply nationwide, Utah has some unique characteristics that first-time buyers should understand:

Water rights are separate from land. Utah is a prior appropriation state, meaning water rights are treated separately from land ownership. Just because a property has a well or irrigation shares doesn't mean those water rights automatically convey with the sale. Your purchase contract should specifically address what water rights (if any) are included. Your title company can help identify water rights, but you may need to independently verify them with the local water district or state water authority.

Mineral rights may be reserved. It's common in Utah for prior owners—particularly when land was originally patented from the federal government—to have reserved mineral rights. This means you might own the surface but not what's underneath. While this rarely affects residential homeowners, it's something to be aware of, and it should appear in your title commitment.

HOA restrictions can be extensive. If you're buying in a planned community or condominium, the CC&Rs (covenants, conditions, and restrictions) and HOA rules can significantly limit what you can do with your property. These restrictions appear in your title report, but you should request and carefully read the actual HOA documents. They might restrict everything from exterior paint colors to whether you can run a home business to how many vehicles you can park in your driveway.

Utah uses deeds of trust, not mortgages. When you finance your Utah home purchase, your lender's security interest is called a deed of trust rather than a mortgage. The practical difference is minimal for you as a borrower, but it affects foreclosure procedures and how the lien is released when you pay off the loan.

Property taxes are prorated at closing. In Utah, property taxes are assessed on January 1 but not paid until November of the same year. At closing, property taxes are prorated between buyer and seller based on how many days each of you owns the property during the tax year. This appears as a credit or charge on your closing statement. Also be aware that your property taxes may increase after you purchase, especially if the sale price is significantly higher than the previous assessed value.