If you’re selling your home in Utah, you’re likely curious about the costs involved in closing the deal. Closing costs are the various fees and expenses associated with the finalization of a real estate transaction.
These can include everything from loan payoff amounts to taxes and service fees. In Utah, understanding these costs is essential for accurately budgeting your sale and avoiding surprises at the closing table. Our concise guide will break down how closing costs work in Utah, giving you a clear picture of what to expect when selling your property in the Beehive State.
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Disclaimer: This article provides estimates of a seller’s closing costs that are meant for educational and research purposes only; our calculations are not a guarantee.
What are closing costs?
Closing costs are the fees and expenses involved in finalizing the sale of your property. These can encompass a variety of charges, such as property taxes and insurance, which are generally standard for homeowners and sellers. However, some costs, like transfer taxes, can vary depending on the location of your property at the time of sale.
Mortgage/Loan payoff amount
Before selling your home, one of the key financial obligations is settling the loan payoff amount on your mortgage. This amount represents the remaining balance due on your loan, which must be fully paid to close out the mortgage.
The loan payoff amount typically includes the outstanding principal balance as well as any interest that has accrued over the course of the loan. Additionally, there may be other associated fees, such as prepayment penalties or administrative charges, that must be covered to finalize the terms of the loan and proceed with the sale.
Property taxes
According to WalletHub, Utah ranks sixth in the country in terms of property taxes, above states like West Virginia.
Real estate in Utah is taxed at a rate of 0.52%, with a median home value of $509,900. To get a better idea of what you might owe, consult a property tax calculator.
Reconveyance fee
After the sale of your home is complete and your mortgage has been fully paid off, you’ll typically need to cover a reconveyance fee. This fee is associated with the issuance of a reconveyance deed, which officially clears your debt. Your mortgage lender will be responsible for recording this deed, and the cost may vary depending on the specific city, state, or county where your property is located.
Realty transfer tax
You also might be responsible for what’s known as a realty transfer tax. These are fees assessed by local governments whenever a property changes ownership.
These taxes are sometimes called a “Deed Excise tax” or a “Documentary Stamp tax.” Who ultimately pays these taxes depends on the state, city, or county where the sale occurs.
Utah, unlike most states, doesn’t charge a transfer tax. However, Utah sellers are still responsible for other closing costs.
Real estate agent commission
Unless you’re selling your home for sale-by-owner, you’ll likely have used a local agent. Research indicates that an agent’s expertise can significantly impact your sale: In 2023, homes sold with an agent’s assistance had a median price of $405,000, compared to $310,000 for FSBO sellers.
Working with a real estate agent means paying a commission. This fee covers various services, such as accurately pricing your home, marketing it effectively, and negotiating with buyers to ensure you receive the best possible price and terms.
It should be noted, however, that on March 15, 2024, the National Association of Realtors (NAR) announced a landmark lawsuit settlement that will change the way real estate agent commissions are handled in the future. These changes will “decouple” seller and buyer agent compensation. Industry experts predict that this decoupling will likely lower agent fees and give buyers the ability to negotiate commission amounts directly. Learn more.
HomeLight’s transaction data reveals that the national average real estate agent commission is 5.8% of the property sales price. This commission typically includes fees for both the listing and buyer’s agents, with sellers customarily covering the cost.
Use HomeLight’s commission calculator by entering your city for commission data tailored to your specific area.
Attorney Fees
Some states require an attorney to be present when closing the sale of a property.
Real estate attorneys are not essential for closing in Utah but your real estate agent may suggest working on one anyway.
Homeowners Association/Condo Fees
One of the biggest sticking points for sellers is the fees levied by their homeowners’ association (HOA) or condominium association fees.
Like other fees we’ve discussed, these will vary, not just because of the different rules and regulations of your local HOA but also because HOA regulations vary greatly depending on the state. These fees (or dues) are usually prorated at the time of the sale.
The average monthly HOA fee in Utah is $388.
Seller’s concessions
In Utah, sellers might find themselves covering certain costs at closing due to financing concessions agreed upon during negotiations. These concessions can include contributions towards closing costs, necessary repairs, or even home warranties.
A typical seller concession is repair credits, which may come into play if a buyer’s offer includes a contingency related to a home inspection. If the seller chooses not to address the repairs identified by the inspector, the buyer could withdraw from the deal with their earnest money intact. To avoid this, sellers might offer repair credits—funds allocated to cover the cost of repairs—at closing. It’s worth noting that these concessions are less frequent in seller’s markets since contingencies can deter potential buyers.
Miscellaneous closing costs/fees
These are some of the most common closing costs you’ll face as a seller in Utah. However, keep in mind that many of these costs can be negotiated. Your buyer may be open to discussing certain fees, or a real estate agent or attorney might help you secure a more favorable deal.
If you want to minimize closing costs without risking your sale, HomeLight can connect you with a top local agent to guide you through the process. Alternatively, if you’d prefer to skip the complexities of working with an agent or managing closing costs, consider HomeLight’s Simple Sale program. Selling your home becomes straightforward in just three steps: enter some basic details about your property, consult with one of our Home Consultants, and you could close the sale in as little as 10 days.
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