A lease option is the ability to rent a property with the option to purchase it. The owner and renter enters into an agreement whereby at the termination of the lease option, the renter is bestowed the right to take possession of the property.
The option is considered by doling out a fee by the renter to the owner which customarily comes around 1 to 5% of the agreed upon purchase price.
This option confers the right of purchasing the property at a later date to the renter. In the event of failing to exercise the option, the fee is not refunded to the renter.
The property is appraised at a price con-sensually arrived at considering the cost valid at the time of exercising the option or conception of the contract. The typical length of lease option is 1 to 3 years.
Everything functions similar to a lease except that a schedule is chalked out when the renter can contemplate to buy the property.