There is much advice against a lease/option. Research indicates that most renters do not become home owners under that arrangement, but instead forfeit their deposit money. The research and warnings primarily address situations where the tenant buyer is putting up option money that is at risk. When prices are escalating and you can lock in a good price today for a purchase tomorrow, it might be worth considering. Today, only if you do not have to place large option deposits do I recommend it for my tenant/buyer.
Buyers are in the driver seat and can negotiate terms that are favorable for them. To the want-to-be buyer, I would suggest this option type arrangement with minimal (a nickle above nothing??) option money on the table, a pre-determined sales price, and the right to exercise purchase rights any time during the course of the lease.
If the want-to-be buyer feels confident and can qualify for a mortgage, he/she can take action. If prices escalate, the pre-determined purchase price protects the buyer. If prices go down, the buyer doesnâ€™t purchase or renegotiates the purchase price. With minimal option money at risk, a buyer has these choices.
Why would a seller agree to this? If a seller has an empty house and no buyer prospects in sight, the rent payments for a year are better than sitting on the market for sale and becoming more stale.