A lease option gives the buyer the right to buy your property for a certain price within a defined period of time. Sometimes a non-refundable lump sum option payment is paid at the time the option is granted, to be applied toward the purchase price, but retained by the Seller if there is no closing. A typical option is three to five years; the price is typically set at the time the lease is signed, either with annual set increases or based upon changes in the consumer price index or based upon a future appraisal. Some or all of the monthly rent may be applied toward the purchase price, depending on the terms. There is a lot to consider for both seller and buyer, and the documentation needs careful attention.
Mitch
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