Utah Real Estate Closing Costs: Complete 2026 Breakdown

You've negotiated a purchase price you're excited about, your loan is approved, and you're counting down to closing day. Then you receive your Closing Disclosure and discover you need to bring thousands of dollars more than you expected. What are all these fees? Why are there so many line items? And is this normal?

Closing costs are one of the most misunderstood aspects of buying or selling a home. Many first-time buyers focus exclusively on saving for a down payment, not realizing they'll need additional funds for closing costs. Sellers are sometimes shocked to learn they'll walk away with significantly less than the purchase price after paying commissions and fees.

At Prospect Title Insurance Agency, we've been handling Utah closings since 1967, and we've prepared thousands of settlement statements. In this comprehensive guide, we'll break down exactly what buyers and sellers pay in Utah, explain each category of fees, show you typical costs for different price ranges, and share strategies to reduce your closing costs without cutting corners on protection.

What Are Closing Costs?

Closing costs (also called settlement costs) are the fees and expenses paid when finalizing a real estate transaction. These costs are separate from your down payment—they're the charges for all the services required to transfer ownership, secure financing, and ensure the transaction is legal and properly documented.

Closing costs cover several categories of expenses:

• Loan-related fees charged by your lender for processing and funding your mortgage
• Title and escrow fees for researching ownership, insuring title, and managing the transaction
• Government fees for recording documents and any applicable transfer taxes
• Prepaid items like property taxes, homeowners insurance, and mortgage interest
• Escrow account deposits to establish your tax and insurance reserve account
• Third-party fees for appraisals, inspections, surveys, and other services
• Real estate commissions paid to agents for their services

In Utah, closing costs are divided between buyer and seller based on longstanding customs and what's negotiated in the purchase agreement. Understanding who typically pays what helps you budget accurately and identify opportunities to negotiate.

What Do Buyers Pay at Closing in Utah?

Buyers in Utah typically pay 2-3% of the purchase price in closing costs, though this varies based on your loan type, down payment amount, and what you negotiate with the seller. Here's a detailed breakdown of buyer closing costs:

Loan Origination and Processing Fees (0.5-1.5% of loan amount) are charged by your lender for processing your loan application and funding your mortgage. This includes the origination fee (typically 0.5-1% of the loan amount), underwriting fee ($400-$800) for reviewing and approving your loan, processing fee ($300-$500) for handling paperwork and coordination, and document preparation fee ($150-$300) for preparing loan documents. Some lenders charge all of these separately, while others bundle them into a single origination fee. These fees are often negotiable, especially if you have excellent credit or are bringing a large down payment.

Appraisal Fee ($500-$750) pays for the professional appraisal your lender requires to verify the property's value. Utah appraisal fees have increased in recent years due to appraiser shortages. Higher-priced homes or those in rural areas may have higher appraisal costs. This fee is usually paid upfront when the appraisal is ordered, then credited at closing.

Home Inspection ($400-$650) covers the cost of having a professional inspector examine the property's condition. While not required by lenders, this is money well spent to identify potential problems before you commit to the purchase. Specialized inspections (pest, radon, mold, structural) cost extra. This is typically paid directly to the inspector rather than at closing.

Credit Report Fee ($25-$50) reimburses the lender for pulling your credit reports from all three bureaus. This is a minor cost but appears on your closing disclosure.

Lender's Title Insurance ($300-$700) is required by mortgage lenders to protect their interest in the property. The cost depends on your loan amount, with higher loans costing more. If purchased simultaneously with the owner's policy (which the seller typically buys), you'll receive a significant discount—often 40-50% off the standard rate. You can learn more about title insurance costs in Utah in our detailed guide.

Escrow/Settlement Fee ($250-$600) pays for the escrow company's service in managing the transaction, holding funds, preparing documents, and conducting the closing. In Utah, this fee is customarily split 50/50 between buyer and seller, so buyers pay half of the total fee. However, this is negotiable in the purchase agreement.

Recording Fees ($100-$300) cover the cost of recording your deed and mortgage with the county recorder. Fees vary by county and are based on the number of pages in each document. Buyers typically pay to record the mortgage, while sellers pay to record the deed, though practices vary by county and transaction.

Prepaid Property Taxes (varies) depend on when in the tax year you're closing and when property taxes are due in your county. Utah property taxes are paid in arrears (you pay in November for the previous year), so the allocation at closing can be complex. You might receive a credit from the seller if they owe taxes for their period of ownership, or you might prepay upcoming taxes.

Prepaid Homeowners Insurance ($1,000-$2,500) requires you to pay your first year's homeowners insurance premium in advance. Lenders require proof of insurance before closing. The amount varies based on your coverage level, property value, and chosen deductibles. You'll typically pay this directly to your insurance agent, then it's listed on your closing disclosure.

Prepaid Mortgage Interest ($300-$1,000+) covers interest on your loan from your closing date until the end of the month. The amount depends on when in the month you close and your loan amount. Closing early in the month means more prepaid interest; closing late in the month means less. This is actual interest you owe, not a fee.

Initial Escrow Deposit ($2,000-$5,000) establishes your escrow account that the lender uses to pay property taxes and homeowners insurance. Federal law allows lenders to collect up to 2 months of estimated taxes and insurance plus a cushion. This money sits in your account and is used to pay your first tax and insurance bills.

HOA Transfer Fee ($100-$400) applies if you're buying in a homeowners association. This covers the cost of transferring the HOA membership and providing documents. Some HOAs charge buyers, while others charge sellers. Check your purchase contract and HOA documents.

What Do Sellers Pay at Closing in Utah?

Sellers in Utah typically pay 2-4% of the purchase price in closing costs, though this can be higher if paying full real estate commissions or if significant payoffs are required. Here's what sellers typically pay:

Real Estate Agent Commissions (5-6% of sale price) represent the largest closing cost for most sellers. The seller pays commission for both their listing agent and the buyer's agent. Traditional commission rates in Utah have been 5-6% of the sale price, though this is negotiable and has been evolving following recent legal changes in the industry. On a $400,000 sale, 6% commission equals $24,000. Some sellers negotiate lower rates (4-5%), especially in seller's markets or when using discount brokers. The listing broker and buyer's broker split this commission based on their agreement.

Owner's Title Insurance ($600-$2,000) is traditionally paid by the seller in Utah because they're obligated to deliver clear, marketable title to the buyer. This one-time premium protects the buyer's ownership for as long as they own the property. The cost depends on the purchase price, with higher-priced homes having higher premiums. This is one of the most valuable protections in a real estate transaction. Our guide on title insurance explains the coverage in detail.

Escrow/Settlement Fee ($250-$600) is the seller's half of the total escrow fee. In Utah, escrow fees are customarily split 50/50, though this can be negotiated differently. The escrow company manages the entire transaction, holds funds, prepares closing documents, and ensures everything is properly executed.

Recording Fees for Deed ($50-$150) cover the cost of recording the deed that transfers ownership to the buyer. While this is a relatively small fee, it's typically the seller's responsibility as part of delivering clear title.

Transfer Tax and Recording Fees (varies by county) are charged by some Utah cities and counties, though Utah doesn't have a state transfer tax. These fees vary significantly by jurisdiction. Some counties charge minimal fees, while others (particularly resort areas) may charge more. Your title company can tell you exactly what applies in your location.

Mortgage Payoff (remaining balance) pays off your existing mortgage in full. The payoff amount includes your remaining principal balance, accrued interest through the payoff date, and any prepayment penalties (rare in Utah but check your loan documents). Your title company obtains the exact payoff amount from your lender and ensures it's paid before releasing the mortgage lien.

Home Warranty (optional, $400-$800) is sometimes provided by sellers to make their property more attractive to buyers. This is completely optional and negotiable. Some sellers offer warranties to ease buyer concerns, while others don't include them. If your buyer requests a home warranty and you agree, you'll pay this fee at closing.

Prorated Property Taxes (depends on closing date) are allocated based on how many days of the tax year you owned the property. Utah property taxes are paid in November for the previous year, so the calculation depends on whether taxes for the current year have been paid yet. If you're selling in August and haven't paid that year's taxes yet, you'll owe the buyer a credit for your portion (January-August). If you're selling in December and already paid the full year's taxes in November, the buyer owes you a credit for their portion.

HOA Dues Proration (if applicable) works similarly to property taxes. If you've prepaid HOA dues beyond your ownership period, the buyer credits you for the unused portion. If dues are unpaid, you pay them at closing or credit the buyer.

Outstanding Liens (varies) must be paid at closing. This includes any mechanic's liens, judgment liens, tax liens, or other encumbrances discovered during the title search. These amounts aren't typical closing costs but rather debts that must be cleared to deliver clear title. Our guide on common title issues covers these situations in detail.

Credits to Buyer (negotiated amount) may include seller concessions you agreed to in the purchase contract, repair credits in lieu of making agreed-upon repairs, closing cost credits to help the buyer qualify for financing, or other negotiated credits. These show as debits to you and credits to the buyer on the settlement statement.

How Are Closing Costs Divided Between Buyer and Seller?

Utah has established customs for who pays which closing costs, but these are traditions, not laws. Everything is negotiable in your purchase agreement. Here's the typical allocation:

Buyer traditionally pays: all loan-related fees (origination, processing, underwriting), appraisal fee, home inspection, lender's title insurance policy, half of the escrow fee, recording fee for their mortgage, all prepaid items (taxes, insurance, interest), initial escrow account deposits, and their attorney fees if applicable.

Seller traditionally pays: real estate agent commissions for both agents, owner's title insurance policy protecting the buyer, half of the escrow fee, recording fee for the deed, transfer taxes or county fees, payoff of their existing mortgage, prorated property taxes for their ownership period, HOA transfer fees (varies by HOA), and any agreed-upon repairs or credits.

Negotiable items: In practice, almost any cost can be reassigned through negotiation. In a buyer's market, sellers might agree to pay some or all of the buyer's closing costs to make the deal happen. In a seller's market, buyers might offer to pay costs traditionally covered by sellers to make their offer more attractive. Cash buyers often negotiate differently than financed buyers because they have no loan costs.

The key is that everything appears on the settlement statement, clearly showing who pays what. The title company prepares a detailed accounting, and both parties review and approve it before closing.

What Are Prorations and How Do They Work?

Prorations are one of the more confusing aspects of closing costs. These are expenses that cover a period of time (like property taxes or HOA dues) that must be fairly divided between buyer and seller based on who owned the property when.

Property Tax Prorations in Utah require understanding that property taxes are paid in arrears—you pay in November for the previous year. Here's how it works: If you're closing in March 2026, the 2025 taxes were paid by the seller in November 2025. But the 2026 taxes won't be due until November 2026. At closing in March 2026, you prorate the 2026 taxes even though they haven't been paid yet. The seller owes for January-March (3 months), and the buyer is responsible for April-December (9 months). The seller typically credits the buyer for their portion at closing, and the buyer will pay the full year's taxes when they come due in November.

HOA Dues Prorations work more simply because HOA dues are typically prepaid monthly or quarterly. If the seller paid April dues on April 1 and you close on April 15, the seller has prepaid the last 15 days of April. The buyer credits the seller for the unused 15 days of prepaid dues.

Rent Prorations apply if you're buying a property with tenants. If rent for the month has been collected but the seller only owned the property for part of the month, they credit the buyer for the portion of rent covering the buyer's ownership period.

Utility Prorations are less common in Utah residential transactions. Usually, sellers pay their final utility bills before closing, and buyers establish new accounts. However, if utilities are included in HOA dues or in multi-unit properties, prorations may be necessary.

How Can You Reduce Your Closing Costs?

While you can't eliminate closing costs entirely, several strategies can reduce what you pay without sacrificing important protections.

Negotiate seller concessions as part of your purchase offer. In the current market, it's common for buyers to request 2-3% of the purchase price as a seller credit toward closing costs. This is particularly viable in buyer's markets or when you have leverage in negotiations. Structure this as "Seller to credit Buyer $8,000 toward closing costs" in your offer.

Shop around for services where you have a choice. While your lender may require you to use specific providers for some services, you can shop for homeowners insurance, choose your own home inspector, and potentially select your title company (though the seller often makes this choice in Utah). Comparing quotes can save hundreds of dollars.

Close at the end of the month to minimize prepaid interest. Since you prepay interest from your closing date through the end of the month, closing on the 28th or 29th means only 2-3 days of prepaid interest instead of 20+ days if you close early in the month. On a $350,000 loan at 7% interest, this could save you $500-$700.

Ask your lender about no-closing-cost loans where the lender covers closing costs in exchange for a slightly higher interest rate. This can be beneficial if you don't plan to keep the loan long-term or if you're short on cash. Calculate the break-even point to determine if this makes sense for your situation.

Review your Loan Estimate carefully and question any fees that seem excessive or duplicative. Lenders are required to provide a Loan Estimate within three days of your application. Compare offers from multiple lenders, focusing on the total cost rather than just the interest rate.

Negotiate real estate commissions if you're the seller. While traditional rates have been 5-6%, you can negotiate lower rates, especially in seller's markets or if you're selling a higher-priced home where the percentage translates to substantial dollars. Be aware that lower commission rates might affect how aggressively agents market your property.

Ask about first-time homebuyer programs that offer closing cost assistance. Utah Housing Corporation and various county programs offer down payment and closing cost assistance for qualified buyers. These programs can provide grants or low-interest loans to cover costs you'd otherwise pay out of pocket.

Time your closing strategically regarding property taxes. If taxes in your area are due in November and you close in October, you might avoid having to establish a large escrow account since the seller will have just paid the taxes. Closing right after tax payment can reduce your initial escrow deposit requirements.

Consider a flat-fee or discount title company carefully but don't sacrifice quality for savings. The cheapest option isn't always the best value. At Prospect Title, we've been serving Utah for 59 years with competitive rates and exceptional service. We catch issues that less experienced companies miss, potentially saving you thousands in future problems.

What Additional Costs Should You Budget For?

Beyond the closing costs that appear on your settlement statement, several additional expenses occur around the time of your home purchase or sale. Budget for these to avoid surprises:

Moving costs ($500-$5,000+) vary dramatically based on whether you're DIYing with a truck rental or hiring professional movers, how far you're moving, and how much stuff you have. Get quotes well in advance, especially if you're closing during peak moving season (May-September).

Immediate repairs and maintenance ($1,000-$10,000+) are common after purchase even with a good inspection. You might need to paint, replace carpets, fix minor issues the inspector found, or make updates before moving in. Budget a cushion for these expenses.

Utility deposits and setup fees ($100-$500) apply when establishing new utility accounts. Some providers require deposits for new customers, especially if you have limited credit history.

Address change costs ($50-$200) include forwarding mail, updating your driver's license, changing your address with banks and credit cards, and other administrative updates.

Immediate furnishings or appliances ($500-$5,000+) might be needed if the home doesn't include appliances you expected or if you need window coverings, lawn equipment, or other items specific to the new home.

Increased utility costs if you're moving to a larger home or one that's less energy-efficient than your previous residence. Review average utility costs for the property during your due diligence period.