Barbara did a great job explaining to you how a lease/option contract works; however, I would like to reiterate that the "option" money is NON-REFUNDABLE. Although the buyer and seller can agree on ANY upfront amount as the "option," it has been my experience as a Realtor in the Pensacola area that this typically costs the potential buyer around $5,000 for the "option to purchase." This is perceived as a reasonable amount since the seller must take their property "off the market" until the lease expires, and there's no guarantee that the buyer will purchase the property. In which case, the seller would have wasted a significant amount of time in trying to sell their property.
Unless the potential buyer has a significant amount of cash, a lease/option purchase contract is basically useless to a potential buyer if the individual is not "serious" about purchasing the subject property at the end of the lease term. Essentially, the "option" money could be better utilized as a down payment or for closing costs when the buyer's personal situation is more conducive to purchasing.