what is a lease option agreement?

Question

i need to know who this works

Answer 1

A "lease option" is really two separate but related agreements: a "lease agreement" and an "option agreement".


A LEASE AGREEMENT is just a standard agreement to rent a home. In general, a lease agreement gives you the right to live in a home in exchange for payment of rent. Typically, move-in charges to rent a home might look like this:


Security Deposit
$1,000
(Refundable)

One Month’s Rent
$1,050
(Non-Refundable)

Cleaning Fee
$ 250
(Non-Refundable)

TOTAL MOVE-IN
$2,300





An OPTION AGREEMENT is the right to purchase the home within a specified period of time for a fixed purchase price . For example, the option agreement could state that you had the right to purchase the home at any time before March 1, 2004 for a purchase price of $150,000. There would be an initial option payment of $2,000 and, in addition to your rent every month, there would be Additional Option Consideration of $250 per month. Therefore, the total monthly payment might be, for example, $1,050 rent + $250 additional option consideration for a total of $1,300 per month.

Answer 2

you rent the property [this is the lease].

you also get the option [right to choose later] to buy the property in the future for a specified price, or a price that can be objectively calculated. The option need not be exercised when that future date comes if you don't think it is a good deal at the time.

as you'd guess, a lease option deal costs more than simply renting a similar house.

Property owners try to use these as a way to end up selling the house, usually for more than the current market value. Frequently, they accept tenants who could not get a loan today to buy the house ... part of the total amount paid each month is usually for the extra risk this involves. {tenant is supposed to 'fix' his credit while living there so he can get a loan later to close the deal.}

Depending on the jurisdiction, the option part costs extra per month (some states), or is implied in the total price. [depends on state law]. Sometimes, a portion of the monthly total applies toward the eventual purchase price [which amounts to saving toward a down payment ONLY if you actually buy the place and otherwise simply enrichs landlord.]


As always in real estate, there is no free lunch and you'll pay for any special consideration you get -- somehow.


does this help?

Answer 3

A lease option is when you the leasee agrees to pay the owner x-amount in excess of your normal lease payment with the option of buying the place with x-amount of time.

Usually a non-refundable deposit of some kind is required and if you choose not to buy within the specified period of time it and the extra amount you have been paying are forfeit. If you decide to buy (depending on the wording of the option) all or part of the deposit and the extra payments would be applied towards the purchase price.

A lease option, commits the owner to sell to you for a set price within a certain time frame, but it does not commit you to anything. (The only consequence you face is losing the money if you do not buy).

Answer 4

its an agreement that you have the option to purchase the property you are leasing at a specified price for a specified period of time. Email me if you want more information on it. Are you talking about a house or Condo, or a car or what?

Answer 5

I may have one for you depending on which city/state you live in.