Paying cash or taking a mortgage in Florida

What cash actually buys you

Certainty, speed, and a discount that is real but smaller than people think.

• No financing contingency and no appraisal contingency, which is what a seller is really buying when they take a cash offer.
• Two weeks to close instead of five.
• No lender fees, no mortgage insurance, no interest.
• Access to properties a lender will not touch — a condominium building that fails project review, or a house that will not appraise in its current condition.

That last one is underrated. In parts of the South Florida condominium market, the set of buildings a lender will finance and the set that exist are quite different, and cash is what opens the gap.

What it costs you

Liquidity, leverage and, for most buyers, the deduction.

The clean way to frame it: a mortgage at 6.75% is expensive money, but it is money you can invest elsewhere. Paying cash is a guaranteed 6.75% return — which is a good return, and it is also irreversible without a cash-out refinance at whatever rates are then.

And leverage cuts both ways. Put 20% down on a $400,000 home and a 4% year gives you 4% on $400,000, not on $80,000. That is the investor’s argument for financing, and it works identically in reverse.

The consequence for a foreign buyer

FIRPTA withholding at the sale is calculated on the price, not on the gain, and paying cash does not change that.

When a foreign person sells US real property, the buyer generally must withhold 15% of the gross sale price and remit it to the IRS. On a $600,000 sale that is $90,000 held back, regardless of whether there was a profit and regardless of how the purchase was funded. It is recoverable through a filing, or reducible in advance through a withholding certificate application — but it has to be planned before closing.

The point for a cash buyer specifically: people who pay cash often assume the transaction is simple at both ends. The purchase is. The sale is not.

The middle path most people miss

Offer cash, close cash, and finance afterwards — or offer financed with a large down payment and a short financing contingency.

A 40% down payment with a ten-day financing contingency competes with cash far better than a 20% offer with thirty days. Sellers are pricing certainty, and certainty can be bought with structure as well as with cash.