Let’s be real—closing costs catch a lot of first-time buyers off guard.
You get pre-approved, find a house you love, make an offer, and then your lender drops the news: you need to bring thousands of dollars to closing on top of your down payment. Wait, what?
Closing costs are the collection of fees and charges required to finalize the real estate transaction. They’re split between the buyer and seller, but as the buyer, you’ll often be responsible for a decent chunk. The good news? They’re not random. Each fee serves a specific purpose, and once you understand them, it all makes a lot more sense.
So, what do closing costs actually include? Here’s a breakdown of some of the most common line items you’ll see:
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Loan Origination Fee: What your lender charges to set up your loan. Usually 0.5% to 1% of the loan amount.
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Appraisal Fee: Pays for a licensed appraiser to determine the market value of the home.
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Title Insurance: Protects you and your lender from potential disputes over property ownership.
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Escrow Fees: Charged by the escrow company handling the transaction.
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Property Taxes & Insurance: Often paid upfront for the first year and put into your escrow account.
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Recording Fees: Charged by the local government to officially record the sale.
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Underwriting Fees: The cost of the lender reviewing your financials and finalizing the loan.
In Utah, a typical buyer can expect to pay anywhere from 2% to 4% of the home’s purchase price in closing costs. On a $500,000 home, that’s roughly $10,000 to $20,000. It’s a big range because it depends on your lender, the type of loan, location, and other factors.
Here’s a real-life scenario:
Let's say you’re buying your first home in Sandy for $475,000. Your lender pre-approves you and estimates closing costs around 3%. That’s $14,250. In that estimate, $6,000 might go to property taxes and homeowners insurance for the first year. Another $4,500 might be split between appraisal, title, and escrow fees. The rest goes toward your loan setup and county fees.
When you first hear that number, it’s easy to panic. But when you break it down line-by-line, it becomes manageable—and something we can plan for together.
Can closing costs be negotiated or reduced? Yes! Here are a few options:
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Ask the seller to contribute toward closing costs (especially in a buyer’s market)
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Shop around for lenders and title companies
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Choose a loan program with reduced fees
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Look into first-time homebuyer grants that cover or reduce costs
Pro tip: Always ask your lender for a Loan Estimate and review every line with your agent. You deserve to know where every dollar is going.
Why do they matter so much? Because being prepared for closing costs means fewer surprises, smoother closings, and way less stress on one of the biggest days of your life. Too many buyers get blindsided late in the game—but not you. Not on my watch.
