What is a "lease-option"?

A "lease-option" is a specific type of lease agreement that provides the tenant with the right, but not the obligation, to purchase the property at a predetermined price before the lease expires. This arrangement benefits tenants who may want to eventually buy the home they are renting, allowing them to live in the property while securing the option to purchase it later. The lease part of the agreement establishes the terms of renting while the option component allows the tenant to consider buying the property in the future, often providing time to improve their financial situation or to evaluate whether they want to own the property long term.

In this context, it is important to note that while other options may involve rentals or options, they do not encapsulate the unique feature of an agreement that combines both leasing and purchasing rights. This is what distinctly characterizes a lease-option agreement and makes it a popular choice for both buyers and sellers in various real estate markets.