Clairesmom, Both Buyer and Seller in Chicago Heights, IL

What risks do a lease option hold for the buyer and what benefits do a lease option hold for the buyer?

Asked by Clairesmom, Chicago Heights, IL Thu Jan 24, 2013

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I am a little confused by the previous answer, and perhaps I am misunderstanding your question.

Are you asking about a "lease with the option to buy" agreement?

If so, there are a number of risks for the buyer....very few for the seller.

The price will be decided at the beginning of the lease.
The tenant will pay for the "option to buy" the home - that is in the form of a non-refundable deposit either given upfront, or as an amount of rent over and above the normal rent.
The buyer doesn't have to buy, but the seller has to sell.
That's why the buyer would forfeit the deposit - they are paying for that "option" to walk away.
If they cannot buy the home for whatever reason - ie: don't qualify for a loan - they will lose their upfront money.

I won't go into more detail until I am sure I understand your question!
1 vote Thank Flag Link Thu Jan 24, 2013
Thank you Debbie, you totally nailed my question. :)
Flag Wed Jan 30, 2013
Glad to have been of help Clairesmom - thanks for the "best answer"!

Good luck to you!


Just to further clarify for anyone reading this thread who might be confused by the first response - a "right of first refusal", in which the tenant is offered the house before it is marketed or sold to others is an entirely separate and different option from a true "lease with the option to buy".
1 vote Thank Flag Link Thu Jan 31, 2013
Rental with a lease option usually only gives the renter first rights if the owner intends to sell. It doesn't establish a sale price or even allow a rental rebate toward purchase, unless that is negotiated. In my opinion, it is really rather useless, because if an owner wants to sell and the renter can buy for the price they agree upon, of course they will sell to the renter. Why wouldn't they.

It does not obligate the renter to buy and agrees to nothing.
0 votes Thank Flag Link Thu Jan 24, 2013
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