For Buyers
Buying a home in Utah is an exciting milestone. Here are the essential topics every buyer should understand before making an offer.
When you make an offer on a home in Utah, you will submit earnest money as a good-faith deposit to show the seller you are serious. In Utah, earnest money typically ranges from 1% to 2% of the purchase price. For a $400,000 home, that means $4,000 to $8,000 deposited into an escrow account held by the title company. This money is applied toward your down payment and closing costs at closing. However, if you back out of the deal outside the terms of the contract, you could forfeit your earnest money to the seller. Understanding the Utah Real Estate Purchase Contract (REPC) deadlines is critical to protecting your deposit.
Title insurance protects you from financial loss if there are defects in the title to your property -- things like unpaid liens, recording errors, undisclosed heirs, or forgery. In Utah, there are two types of title insurance policies. The lender's policy is required by your mortgage company and protects the lender's interest in the property. The owner's policy is optional but strongly recommended, as it protects your equity and ownership rights for as long as you own the home. In Utah, the buyer typically pays for the lender's policy while the seller pays for the owner's policy, though this is negotiable. Title insurance is a one-time fee paid at closing, usually ranging from $500 to $2,000 depending on the purchase price.
Utah has some of the lowest property tax rates in the nation. The average effective property tax rate across the state is approximately 0.58% of the home's assessed value. This means on a $400,000 home, you can expect to pay roughly $2,320 per year in property taxes. However, rates vary by county. Salt Lake County's rate is around 0.67%, while rural counties like Iron County may be closer to 0.55%. Utah also offers a primary residential exemption that reduces the taxable value of your home by 45% if it is your primary residence. Property taxes in Utah are paid in November, and your lender will often collect a monthly escrow payment to cover them.
Many Utah neighborhoods, especially newer developments and condominiums, have homeowners associations (HOAs). Monthly HOA fees in Utah typically range from $50 to $350 or more depending on the community and amenities provided. Before buying, carefully review the HOA's CC&Rs (Covenants, Conditions, and Restrictions), financial statements, and reserve fund. Utah law requires HOA sellers to provide a resale certificate that outlines current dues, any pending special assessments, and the HOA's financial health. Pay attention to rules about landscaping, exterior modifications, parking, and rental restrictions. A well-managed HOA can enhance property values, but an underfunded one can lead to surprise special assessments down the road.
Utah's standard Real Estate Purchase Contract (REPC) includes a due diligence period, typically 14 days from the date the contract is accepted. During this window, you have the right to conduct inspections and investigate the property. This includes a general home inspection, radon testing (important in many Utah areas), pest inspections, sewer scope, and any other evaluations you deem necessary. If issues are discovered, you can request repairs, negotiate credits, or walk away from the deal entirely with your earnest money intact. Once the due diligence deadline passes, your options become more limited. It is essential to schedule inspections quickly and work with your agent to respond within the contract timelines.
In addition to your down payment, you should budget for closing costs, which in Utah typically range from 2% to 5% of the purchase price. For a $400,000 home, that means $8,000 to $20,000 in additional costs. Buyer closing costs typically include loan origination fees, appraisal fee ($400-$600), credit report fee, title search and insurance, escrow/settlement fees, recording fees, prepaid property taxes, prepaid homeowner's insurance, and prepaid interest. Your lender is required to provide a Loan Estimate within three business days of your application, and a final Closing Disclosure at least three days before closing so you can review all costs. In some cases, you can negotiate for the seller to contribute toward your closing costs.
Under Utah law, sellers are required to complete a Seller's Property Condition Disclosure form. This document covers known material defects, including structural issues, roof condition, plumbing and electrical systems, water damage, mold, pest infestations, environmental hazards, and any prior insurance claims. Sellers must also disclose if the home is in a flood zone, if there are easements or encroachments, and if any additions or modifications were done without permits. For homes built before 1978, federal law additionally requires a lead-based paint disclosure. While sellers must disclose known issues, they are not obligated to perform inspections on your behalf, which is why your own independent inspection during the due diligence period is so important.
This page covers what every Utah home buyer needs to know before making an offer: earnest money, title insurance, property taxes, HOA fees, home inspections, radon testing, and closing costs. Written by Judy Beltran, Top 250 Utah Realtor.
This is an educational guide covering the key financial and legal topics Utah home buyers should understand before purchasing a home.
Earnest money is a good-faith deposit, typically 1-2% of the purchase price, deposited into escrow after an accepted offer. It is applied toward your down payment at closing.
Get a general home inspection ($350-500), radon test (elevated radon is common in Utah), sewer scope, and pest inspection. You have 14 days for due diligence under the Utah REPC.
Utah’s average effective property tax rate is approximately 0.58%. Primary residence owners receive a 45% reduction in taxable value.
This guide is written by Judy Beltran, a Top 250 Utah Realtor with Iron Mountain Realty. Phone: (801) 919-5253.