What is a lease-purchase agreement?

Answer

A lease-purchase agreement is one a homeowner sets up with a renter who wants to buy the property at a later date, possibly when they are in a better financial position to do so. A contract is typically set up that gives the renter the option to buy the house at a specified date, and the renter generally puts down some option money for the privilege.

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The renter pays rent, and part of it usually goes toward the purchase price of the house. Sometimes rent might be a bit higher than market rate because of this. If the renter can’t buy at the specified date, they typically lose the option money and all the rent they paid, including the rent that went toward the purchase price.

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