The differences between a lease option and a purchase agreement:

1. Lease Option:
   • A lease optionis an arrangement that grants a renter the choice to purchase the rented property either during or at the end of the rental period.
   • Key points:
     • The renter has the flexibilityto decide whether to buy the property.
     • The owner cannotoffer the property for sale to anyone else during the lease option period.
     • The renter typically pays a premiumabove the standard monthly rent, which contributes to the down payment for buying the home.
     • Lease options may last for any period, but they commonly expire after two to three years.
     • The buyer-tenant may be responsible for maintenance and repairsthat are normally the landlord’s duty.
   • How it works:
     • The home price is agreed upon upfront by the buyer (renter) and the owner.
     • The purchase price is agreed upon between the buyer and seller for the sale at a later date.
     • The renter pays an upfront fee(often 1%-5% of the home’s sale price), which can becomes part of the down payment if they choose to buy the home at the end of the lease.
     • Lease options are helpful for those building credit or lacking sufficient savings for a down payment.

2. Purchase Agreement:
   • A purchase agreement(also known as a lease purchase agreement) commits both parties (buyer and seller) to the sale of the property once the term has expired.
   • Key points:
     • Both parties are legally bound to initiate the transaction once the lease period ends.
     • Exiting a purchase agreement can be costly.

In summary, a lease option provides more flexibility to potential buyers, while a purchase agreement creates a firmer commitment for both parties. Choose wisely based on your specific circumstances!