Who Pays Closing Costs in a Utah Real Estate Transaction?

In a Utah real estate transaction, both the buyer and seller usually pay some closing costs. Some costs are customary. Some are lender-required. Some are tied to title and escrow. Others are negotiable in the Real Estate Purchase Contract.

The simplest answer is this:

The buyer usually pays costs connected to the buyer’s loan.

The seller usually pays costs connected to transferring clear ownership and selling the property.

But many closing costs can be negotiated.

That is why the contract matters.

Todd Porter, known as Utah Todd, and Tammy Swain are real estate agents with SURE Group, brokered by Real Estate Essentials, helping buyers, sellers, and relocating families in Davis County, the Wasatch Front, and Northern Utah.

Buyer Closing Costs vs. Seller Closing Costs

Here is the practical breakdown.

Buyers commonly pay for:

• Loan origination fees

• Appraisal

• Credit report

• Underwriting

• Lender’s title insurance policy

• Recording of loan documents

• Prepaid homeowners insurance

• Prepaid interest

• Tax and insurance reserves

• Buyer portion of escrow or settlement fees

• Buyer brokerage compensation if not paid by seller or another source

• Inspection costs, usually paid before closing

Sellers commonly pay for:

• Owner’s title insurance policy

• Seller portion of escrow or settlement fees

• Mortgage payoff

• Real estate brokerage compensation

• Property tax prorations

• HOA-related fees if negotiated or required

• Recording or document-related seller fees

• Buyer closing cost credits if negotiated

• Repair credits if negotiated

• Home warranty if negotiated

This is the general pattern.

But the final answer depends on the contract.

What Does the Utah Contract Say?

The Utah Real Estate Purchase Contract is a legally binding contract, and Utah law requires real estate licensees to use that form unless the parties agree otherwise. The contract also advises parties to consult an attorney or tax advisor if they need legal or tax advice.

That is important because buyers and sellers should not rely only on what is “normal.”

They should rely on what is written and agreed to.

The REPC allows parties to address escrow fees, prorations, HOA or change-of-ownership fees, special assessments, and seller contributions to buyer brokerage compensation when applicable.

Who Pays Title Insurance in Utah?

Title insurance is one of the biggest examples of customary cost sharing.

The Utah Insurance Department says the seller usually pays for the buyer’s owner’s title policy, while the buyer usually pays for the lender’s title policy if a lender is involved.

That means:

The seller usually pays to help protect the buyer’s ownership interest.

The buyer usually pays to protect the lender’s interest.

That is the common Utah pattern.

Who Pays Escrow Fees?

Escrow fees are paid to the closing or settlement company handling the transaction.

The Utah REPC states that unless otherwise agreed in writing, the buyer and seller each pay their respective fees charged by the escrow or closing office for settlement and closing services.

In real life, title companies will show these charges on the settlement statement.

Buyers and sellers should review them before closing.

Who Pays Property Taxes?

Property taxes are typically prorated.

That means the seller pays for the part of the year they owned the home, and the buyer pays for the part of the year after settlement.

The Utah REPC says prorations, including property taxes and HOA dues, are made as of the settlement deadline unless otherwise agreed in writing.

This is not usually about one side “winning.”

It is about fairly dividing costs based on time of ownership.

Who Pays HOA Fees?

HOA fees can get tricky.

There may be regular dues, transfer fees, reinvestment fees, document fees, setup fees, or special assessments.

The Utah REPC includes sections addressing special assessments and certain HOA or change-of-ownership fees, with options for seller, buyer, split equally, or other agreed terms.

That means the answer depends on what the contract says and what the HOA requires.

Buyers and sellers should not guess on HOA costs.

They should ask early.

Who Pays Buyer Agent Compensation?

This is one of the most important modern closing cost questions.

Buyer brokerage compensation can be handled in different ways depending on the buyer representation agreement, listing terms, seller concessions, and contract structure.

The Utah REPC includes language for a seller compensation contribution to the buyer’s brokerage if applicable. If no amount is entered, the seller has not agreed to compensate the buyer’s brokerage in the REPC.

So the answer is not automatic.

It should be discussed before writing or accepting an offer.

Can Buyers Ask Sellers to Pay Closing Costs?

Yes.

A buyer can ask the seller to pay some buyer closing costs.

This is often called a seller concession or seller-paid closing cost contribution.

A buyer might ask for help with:

• Closing costs

• Prepaid taxes and insurance

• Rate buy-down

• Title or escrow costs

• Buyer brokerage compensation if applicable

• Other allowable costs

But the seller does not have to agree.

The offer must make sense to both sides.

Can Sellers Refuse to Pay Buyer Closing Costs?

Yes.

A seller can refuse, counter, or agree.

The seller may look at:

• Purchase price

• Buyer strength

• Financing type

• Appraisal risk

• Inspection risk

• Closing timeline

• Net proceeds

• Competing offers

A seller may accept a lower price with fewer concessions.

Or the seller may accept a higher price with seller-paid buyer costs.

The net matters more than the headline price.

Common Buyer Scenario

A Utah buyer may say:

“We need the seller to pay $8,000 toward our closing costs.”

That may be possible.

But the buyer needs to understand how that affects the offer.

If two offers are identical, but one asks the seller to pay $8,000 and the other does not, the seller may view the second offer as stronger.

That does not mean buyers should never ask.

It means the request needs to be strategic.

Common Seller Scenario

A Utah seller may say:

“We got a full-price offer.”

Great.

But what are the terms?

A full-price offer with $15,000 in seller concessions may not be as strong as a slightly lower offer with fewer costs, better financing, and cleaner terms.

That is why sellers need to review the net, not just the price.

Common Mistakes Buyers and Sellers Make

Mistake 1: Assuming closing costs are fixed

Some costs are lender-required or title-related.

Others are negotiable.

Mistake 2: Not reading the contract

The answer is often in the REPC and any addenda.

Mistake 3: Ignoring seller net

Sellers should compare offers based on net proceeds, risk, and terms.

Mistake 4: Ignoring buyer cash to close

Buyers should understand how closing costs affect total cash required.

Mistake 5: Waiting until the settlement statement to care

By then, it may be too late to renegotiate.

Understand the money before signing.

FAQ: Who Pays Closing Costs in Utah?

Does the buyer or seller pay closing costs in Utah?

Both usually pay some closing costs. Buyers usually pay loan-related costs. Sellers usually pay costs tied to selling and conveying ownership. Some costs are negotiable.

Who pays for title insurance in Utah?

The seller usually pays for the buyer’s owner’s title policy. The buyer usually pays for the lender’s policy if using financing, according to the Utah Insurance Department.

Who pays escrow fees in Utah?

The Utah REPC states that unless otherwise agreed to in writing, buyer and seller each pay their respective escrow or closing office fees.

Who pays property taxes at closing in Utah?

Property taxes are typically prorated as of settlement unless the parties agree otherwise in writing.

Can a seller pay buyer closing costs in Utah?

Yes, if negotiated and allowed under the buyer’s loan program. Seller-paid closing costs can help buyers reduce cash needed at closing, but they reduce the seller’s net.

Does Utah have a real estate transfer tax?

Utah generally does not have a statewide real estate transfer tax, unlike many other states.

Final Thoughts

In a Utah real estate transaction, closing costs are not just random fees.

They are part of the strategy.

Buyers need to know their cash to close.

Sellers need to know their net proceeds.

Both sides need to understand what is customary, what is required, and what is negotiable.

The smartest move is simple:

Do the math before you sign.

Todd Porter, known as Utah Todd, and Tammy Swain are real estate agents with SURE Group, brokered by Real Estate Essentials, helping buyers, sellers, and relocating families in Davis County, the Wasatch Front, and Northern Utah.

Website: SUREUtah.com
Todd: 801-755-1882
Tammy: 602-350-5325
Email: [email protected]
Email: [email protected]

Motto: “Real estate is not only an agent’s business, it’s everyone’s business.”